24 November 2009

Week In Review

When it comes to the current real estate climate, we at Better Homes and Gardens Real Estate have been preaching cautious optimism for months, as some data indicates the market is recovering and yet other data indicates it is still turbulent times. A recent survey from Move.com indicates the number of consumers interested in investing in real estate has doubled since March 2009. This optimistic data, along with a reported uptick in first-time homebuyers, is in part a factor of the extended and expanded tax credit, which more than 2 million homebuyers have taken advantage of to date; the increasing affordability of homes, bolstered by affordable interest rates and low house prices; and the government’s eagerness to guarantee the mortgages of middle-class and even upper-class buyers against default.

And yet, while these numbers are optimistic, the caution comes as we realize about one in seven American households are behind on mortgage payments or in foreclosure, many of which are middle class workers which are the very backbone of the American economy, and that home construction slowed 10.6 percent unexpectedly in October – its lowest level in six months. This data is far more indicative of economic health, especially because construction feeds directly into the calculation of U.S. gross domestic product.

But foreclosures and slow down do breed creativity, as vacant homes across the country are being used to hold parties and events. In fact, one rented empty mansion in a Georgia town was used by more than 1,000 costume-clad partygoers to celebrate Halloween. With so many homes left untouched, it is no wonder Fannie Mae unveiled the “Deed for Lease” program, which gives borrowers on the verge of foreclosure an option to rent their home. The jury is still out on the long-term affects this move could have on the real estate industry. Stay tuned…

Although there is plenty of blame to go around for this crisis, the National Association of Realtors this week said that Realtors are not to be blamed because we – as a whole – don’t put people in a home they cannot afford.

In social media news, a growing group of celebrities, bloggers and regular Internet users are allowing advertisers to send commercial messages to their personal contacts on social networks. The idea behind the trend is that people trust recommendations from those they know and respect, while they increasingly ignore nearly ever other kind of ad message in print, on television and online. As we in the real estate industry constantly seek new ways to use (and sometimes abuse) social networking, I wonder what role – if any – this trend could play.

On the mobile front, the question asked this week is will quality matter more than quantity for iPhone applications? For the more than 250,000 active applications on Facebook, only 250 have more than a million monthly active users. The apps that provide value are experiencing tremendous success, while the others get lost in the noise. It is a quality over quantity environment. Will we see the same happen with the more than 100,000 iPhone apps?

2 thoughts on “Week In Review

  1. If I read your post correctly the watch word is moderation. While we may have come to the low point, Realtors shouldn't expect the market to shoot back up to the volume and appreciation rates of 2003/2004. The recent economic events should help the business focus high quality service and maximizing value for customers. That is the way forward.
    Oh, and to blame Realtors for the collapse of the market is to say that the Surfer caused the wave.

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