Analysis: Home sales up in Elgin, entire metro area
Home sales were up in Elgin for the first half of 2010, reflecting a trend for a good portion of the metropolitan Chicago real estate market.According to an analysis of housing transactions for the first six months of this year conducted by RE/MAX, sales continued a steady rebound last month.
Read more on The Courier News

RI housing market set for double-dip
Home prices are set to fall again in Rhode Island now that a federal tax credit which has boosted sales since early last year has expired.
Read more on WPRI Providence

Listless housing market shows the folly of tax credit
July 25–The U.S. housing market was supposed to be on the rebound by now. Instead, recent numbers don’t look much better than they did during the depths of the recession in 2008.
Read more on Builder Magazine

More and more consumers are recognizing that at least for right now they are better of financially renting than buying. This is certainly a departure from the past when most consumers realized that the best financial option would be to buy rather than rent so that their money would go toward creating equity in a home.

Today that is no longer the case; however. While rents have continued to rise in many locations, consumers are still finding they are often able to rent for less money than what they would pay for a monthly mortgage payment on a comparable property. In some cases, renters are able to save between 40% and 50% by renting instead of buying.

One of the reasons for this is that in some locations, property values rose quite steeply. Today, buyers who snatched up those homes without blinking have discovered they must now sell. The problem? They need to sell the homes at the prices at which they purchased them two years ago to recoup the balance they owe on the mortgage. Renters just are not willing to pay more money than a home is worth.

Even renters who are able to qualify for mortgages just do not feel as though they are getting enough home for their money, especially when they can often rent a comparable or even larger home for less money.

As a result of the shifting market, many experts are quick to point out that today the market is no longer a seller?s market and it is not really a buyer?s market either. Instead, it has become more of a renter?s market.

Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters are concerned about the upcoming hurricane season. Few have forgotten the hurricane season of just two years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover.

While some areas are experiencing a deficit in supply of rental properties, in other areas homeowners have recognized the wisdom of holding off on selling their homes. They, too, are reluctant to sell their homes now when it seems more prudent to wait and see when the market will stabilize. To help make ends meet, many of these homeowners are willing to rent out their homes to the scores of renters lining up to take advantage of the opportunity. Even homes that are on the market for sale are also available for rent. While renters must accept the reality that the home in which they are living must be available for showings, they still feel the trade-off is quite worth it.

Would-be investors who attempted to get in on the quick profit potential of flipping homes have also discovered that it makes more sense to rent out their properties right now instead of trying to selling them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments every month and are unable to sell their properties. In some cases, this means renting the properties at a loss, creating a negative cash flow.

In fact, this situation has become so much of a problem that landlords in certain niche markets are finding they must cut rents in order to create even a small amount of cash flow. These investors have quickly discovered that it is far better to rent right away at a loss than wait several months to try and attain the amount of rent they really need. Although landlords are often upside down on most of these properties, renting them out has proven to be the safest method; at least for now.

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The real estate market was hot for so long that many agents who entered the real estate industry during this time period do not have any experience with a buyer?s market. Until the recent real estate market crash, the market definitely favored sellers. Homes sold quickly and in many cases homes sold for prices above the listing price. As a result, buyers learned they had to move quite quickly. In fact, it became quite routine for buyers to waive inspections and other basics in a bid to move forward as quickly as possible. These buyers were quite well aware that it was common during this time for sellers to receive multiple offers. In some cases this could easily escalate into a bidding war.

As the real estate market continues to drop; however, the rules have changed and buyers are now holding the power. Whereas they once wanted to move quickly, they now have the luxury of taking their time. In order to succeed in the current market, agents must be certain they understand the elements of this market.

While it was quite possible to make a large sum of money by simply showing a few properties back when it was a seller?s market; that is no longer the case. You must be prepared to face the realities of the existing market in order to survive it.

One of the realities that should be faced is the fact that homes in the current market will typically take at least six months to sell. In some cases, it may take much longer to sell properties. Compare this to homes that sold in a matter of hours or days when it was a seller?s market, and it quickly becomes apparent how much the market has changed. There are steps that can be taken combat this problem including ensuring that properties have the most exposure possible, especially web exposure. Consider offering virtual tours and using multiple, high-quality photographs. You might also think about increasing commission fees to buyer?s agents who make your listings a priority.

In addition, as you face the reality of the current market you must also make sure that sellers face it as well. Many sellers continue to operate under the idea that they will be able to achieve the same level of prices that were typical not that long ago. As a result, many buyers are unrealistic about the prices they hope to achieve. It is critical that you gently introduce sellers to the reality of the current market. At any given time, the current market has about a six month back load of inventory. Even in markets which have not experienced as much of a downturn as other markets, it is essential for properties to be priced accurately or they will usually remain on the market.

As the market shifts, you may also find that you need to shift your marketing plans. Specifically, it should be understood that most areas are now in a buyer?s market. This means, that more time will need to be given to developing buyer leads in order to liquidate the bulk of inventory that is currently on the market. This is not to say, of course, that you should not take new listings; however, to balance out those listings you must work to bring in buyers as well. One great place to look for buyer leads, especially first-time buyers, is actually rental properties. During a down market, there are usually more renters than homeowners.

Most people do not rent out of choice. If they can see that it is to their advantage to buy and can be provided information that will help them to see how buying can be a reality, most people will choose home ownership over renting. Consider offering seminars that are free of charge at your office on the topic of home ownership. Print up fliers and provide advertisements in the local newspaper.

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