By David Chapman and
The market’s 2007 performance is almost, literally, a thing of the past.
So, what about 2008? More of the same? Or has the market truly bottomed out and the clouds are starting to part a bit?
A survey of numerous sources indicates a mix of guesses, mostly negative on the national level and mostly hopeful around Northeast Florida.
Walter Williams, who heads the large Coldwell Banker Walter Williams operation, says it’s nothing new.
“We’ve gone through market cycles and this one has been longer than others,” he said. “I’ve been through the doldrums in 1981-82 and the savings and loan crisis of the late 80’s.
“We’ve been on a pretty good roll until Spring 2006. I think we’ve been down long enough that it’s about time to come back.”
Another major player on the North Florida real estate scene agrees: Bill Watson of Watson Realty looks for a turnaround.
“I think in September you’re going to see sales exceeding expectations,” he said. “The cycle is turning and you can almost feel it taking place. It’s just that you can’t see the benefits yet. The pieces are beginning in fall in place for a change.”
Others also think there’s not as much doom and gloom that might be expected.
“People seem excited again,” said Dee Bumbarger of Buck & Buck Realtors. “If I had a crystal ball, I’d be on a beach in the Bahamas, but I’ve seen a change recently. Lower-priced homes are selling and you’ve got to start somewhere.”
And Susan Kennedy, whose Vanguard GMAC team is one of the area’s largest and most successful, agrees.
“I think the market will rebound around the first quarter,” she said. I’m always an optimist and I’m optimistic about 2008.”
What do the so-called national “experts” expect?
On the positive side, the ever-cheery National Association of Realtors weighs in with predictions of an upswing.
“Housing is still a good long-term investment and we’ll be seeing a broad, modest improvement in home prices,” said NAR President Pat Combs. NAR’s senior economist, Lawrence Yun, predicts a rise in existing home sales from a projected 5.78 million this year to 6.12 million.
And David Seiders, the respected economist at the National Association of Home Builders, says he expects a turnaround starting in 2008 because the overall economy and job growth are moving ahead at a reasonable pace, core inflation appears to be under control and the credit crunch in mortgage markets is easing.
On the negative, the Mortgage Bankers Association forecasts existing home sales of 5.14 million in 2008. But, they add a little positive: the bottom will come sometime during next year and sales will rebound to 5.4 million in 2009.
Locally, analyst Ray Rodriguez of the Real Estate Strategy Center of Northeast Florida sees a tightening of the market ... of agents.
“I think you’ll see an exodus of Realtors, not from large companies but a lot of the bandwagon jumpers that got on when times are good,” he said. “Those who were selling 3-6 homes a year won’t make it.”
On the sales scene, Rodriguez says “the solution will be an increase in area employment and I don’t see that happening until the end of 2008.”
The real estate problems are known to all: too much inventory, too little consumer confidence.
In our informal survey, it is apparent that industry insiders see the need to somehow get a better attitude among the consumers and the media.
“I wish the media would be a little more positive,” said Sandi Gilbo of Watson Realty. “The money markets and industry markets are largely based on consumer confidence. If we can convince people that it really is a good time and keep it up, people will have a warmer feeling about the market.”
Kennedy says the media’s influence is waning.
“The media played a large part in why it’s slow,” she said. “It has bothered people but I think they’re starting to get it.”
But, how to do that? NAR has been criticized for painting what some think has been a too-rosy picture when, in fact, home sales have plummeted.
“The Realtors have every right and duty to produce a public awareness campaign,” said John Tuccillo, who once was NAR’s chief economist. “It gets a little dicey when you get into the research area and say ‘The numbers are down but that doesn’t mean anything.’”
He pointed to NAR’s continued optimism, one which on the surface appears to have been generated more by hope than research — for instance, NAR’s forecast was too high for eight straight months, and its projections of 6.12 million sales next year is almost 20 percent higher than the projections from either Fannie Mae or the National Association of Home Builders.
Apparently, however, the NAR numbers have been mostly ignored by the national media, which continues to point out the drop in sales.
“If the media will just leave us alone,” said Watson’s Shirley Bennett. “I think we’ll be fine.”
She told of a recent near-sale. The deal was almost made but then “the buyers saw a doom and gloom piece on a national morning television show and dug their heels in.” After that, she said, “We couldn’t get it together.”
Watson says that a change in attitude may be coming.
“More volume will be moved and the media will start to realize it and have more positive things to say,” he said. “That doesn’t mean we are home free. But, it’s going to be like catching the beginning of a wave. It might not be the biggest wave but it’s a step in the right direction.”
The Northeast Florida Builders Association is working on a public awareness campaign that, they say, will put forth a realistic picture of the market while emphasizing the considerable benefits of buying in today’s market.
But, when it comes to buying and selling, the statistics are just numbers floating around and the opinions are only words on a computer or in a newspaper like this one.
When it gets to the buyer, it’s the same story as always:
“Clients need more than just someone to show them a house,” said Russ Goodman of Re/Max Atlantic, one of many who voices this opinion. “You have to understand how things like mortgage rates affect people. Those agents who are educated and truthful will be OK.
“I really believe that people who are real professionals will make it and succeed.”