Tuesday, December 2, 2008

Real Estate Reality Check - aka The Sky Has Not Fallen!

Okay, it's true – While most sales categories in Middle Tennessee are down about 27% from 2007. General activity is slower, some areas have slightly decreased prices, and there are some foreclosures. But, we have NOT seen an alarming loss of value in our market and, overall, the Middle Tennessee market has not experienced anything even near the market deflations of California, Michigan, or Florida.

The Real Estate Market here in Middle Tennessee is very much ALIVE, just not at the high activity level of 2005 and 2006. We must remember that 2005 was a record-breaking year for sales in the history of the Middle Tennessee MLS. Then 2006 broke the 2005 record, WOW, followed by 2007 which was the 5th best year on record (and it was down 25% from 2006).

There is ample cause for Sellers to be frustrated due to the lack of showings on their properties. After two years of multiple offers and homes flying off the market in record time, the Seller public is having a hard time adjusting to a more “normal” Middle Tennessee market.

The majority of this “slow-down” is simply supply and demand. The fact remains that there is still an inventory of 24,000+ properties for sale in Middle Tennessee. And with the buyer pool down about 27% from last year (2007), which was down about 25% from 2006, the average days on the market have gone up. The media’s hyperactive negative reporting of the US and Global economic news can be blamed for a good portion of the lack of buyer confidence.

Sellers are not only frustrated with higher days on the market, but decreased Buyer showings. However, with the advent of virtual tours, and lots of pictures available online, the fact is more and more Buyers are completing their research on the Internet and actually viewing fewer houses in person before they buy. This can cause a Seller to feel their house is being ignored, when in fact there could have been 3-4,000 people look at the house virtually via the Internet. (I have a Franklin listing (the house in the above picture) that has had over 48,000 views on http://www.realtor.com/, but only about a dozen actual showings.)

What I do know for sure is that everyone has to live somewhere and someone owns the property even if you rent. I also know for sure from this research that houses ARE selling . . . and Buyers ARE buying and that the sky hasn’t fallen even though this market more likely resembles 2001 not 2006.

Please remember, people always need to buy and people always need to sell for reasons unrelated to the market. Real estate is still a great investment in Middle Tennessee and this remains an EXCELLENT time to be in the market to BUY a house. Whether you need a primary residence or investment properties. Savvy investors always buy in a down market, because there are a lot more people choosing to rent. It can be an equally good time to sell a house, as well.

If you or anyone you know are contemplating a move but are hesitant to enter what appears to be a volatile market, you should contact me to arrange a time for us to meet so we can explore your unique situation and discover your options in this market.

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