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Market-Ready Real Estate: Today’s Real Estate Climate - Ladue News: Special Features

Market-Ready Real Estate: Today’s Real Estate Climate

After The Bubble

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Posted: Thursday, March 5, 2009 12:00 am

      Some local real estate brokers say the market is down, not out, and are optimistic that things will improve this spring. Others scoff at the idea of a spring awakening.

    Take Stafford Manion, president and owner of Gladys Manion, for example. His advice for anyone who wants to sell a house right now is short and anything-but-sweet: “Get real.”

    In the last quarter of last year, the market spun out of control so fast that everyone panicked, “including me,” recalls Manion. “It happened at the worst possible time, even in a sound economy, we don’t do much business from October through December. It wasn’t pretty. Clients reduced their asking price by 10 percent, and nobody took the bait. Media hysteria added to the mess and made everything seem worse.”

    How did he cope? “I turned off the TV and turned on the ‘70s rock,” he says. “It didn’t help the market, but it did wonders for my state of mind.”

    So did the arrival of the new year. “Since then, we’re selling a few houses again and they’re good deals, favorable for the buyers.” Still, he counsels anyone who bought a house within the past five years and is thinking of selling to hold on. “You won’t get what you paid for it,” says this 30-year veteran of the real estate wars. “You’ll wind up writing a check at closing. It’s horrific out there. Nobody wants to hear it, but the entire market has changed. The world has changed. If you aren’t realistic, you’ll get burned.”

    Listen to your agent, he advises. “Look at what’s actually been sold, not at what’s for sale. ‘Solds’ are fact; ‘for sales’ can be fiction. All that matters is what you’re actually able to get for your house, not your original asking price.”

    The market will improve, he believes, but it will be a slow recovery. “People are waiting for the stock market to shoot up 500 points a day, but that’s what got us into this mess in the first place,” he says. “If it jumps up that much, that fast, it’ll crash down again even faster. The surest sign that the economy is improving will be when it starts going up 20 points a day, slowly but surely, nice and steady over a period of time. That’s the only way we’ll crawl out of this hole.”

    “We can’t guarantee that we’ve seen the bottom of the market, but it’s pretty darn close,” says Andrea Lawrence, president and owner of Prudential Alliance Realtors. “People are understandably cautious. They don’t have confidence in the overall economy, so they don’t know whether to go forward or sit tight when it comes to buying or selling.”

    But hope springs eternal, even in a battered market. “Sales always rise during spring and summer, that was the case even after the sub-prime meltdown of ’07 and its aftermath in ’08,” she explains. “People are out and about during nice weather. We saw a real uptick of interest when it warmed up in February, and open houses were well-attended over Super Bowl Sunday. Also, clients seem encouraged by the stimulus bill’s tax credit for first-time homebuyers and by the prospect of more jobs.”

    Lawrence expects that the high end of the market will come back first. “But what we really need is for first-time buyers to return to the fold. That’s the surest sign that things are improving. When that happens, the economy will be on its way back.”

    Meanwhile, she urges prospective buyers to take advantage of the current low interest rates. “This is a good time to be looking. Educate yourself and get qualified in the loan process.” She advises sellers to get their property in shape and have a clear idea of its value, particularly in relation to the house they want to buy. “Don’t get stuck with two payments because you can’t sell your first house.”

    The dark days will pass, Lawrence says. “There are always cycles in the economy and real estate. The market will turn around, and we’ll be ready when it does.”

    According to Kathy Beilein, general manager at Laura McCarthy Real Estate, the market is already starting to pick up. “There’s tremendous traffic at open houses now,” she notes. “People were in pause mode from October through December, but now they’re coming back.”

    She credits their return to “an abundance of good properties at good prices. New listings always generate heat.” She expects the trend to continue as consumers gain confidence, particularly if the stimulus bill improves the economic outlook. “The tax credit for first-time buyers will be very helpful,” she says. “There was a first-time credit last year, too, but buyers had to repay it.”

    But, like Manion and Lawrence, Beilein cautions sellers to be realistic when it comes to pricing. “A lot of properties have stayed on the market because the owner was so determined to get a ‘fair’ price,” she notes. “Well, fair according to what year, 2005 or right now?”

    Beilein says that any property that’s in good shape and reasonably priced should move. She agrees that an increase in sales to first-time homebuyers will be the first sign that the real estate market is on its way back. “That’s the demographic that typically drives the market after a downturn,” she says. “But who knows? Nothing has been typical for the last two or three years!” 

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