Pessimism about 2009 recovery
Roadmap to Recovery Survey: Preliminary Results
By Inman News, Monday, December 1, 2008.
Editor's note: Inman News is conducting a future-focused real estate industry survey as a part of its Roadmap to Recovery editorial project. This Roadmap to Recovery survey is intended to gather insight into market conditions, what might turn the market around and how the industry must change to adapt to a new world. The results in their entirety will be published in the coming weeks. Inman News is also conducting a separate survey on the Future of Real Estate Commissions. Click to read the second, third and fourth articles in this series.
The real estate industry is coming to grips with the realities of the housing market and most professionals are not predicting a turnaround until 2010 or later, according to early results from an Inman News survey.
Those results are based on responses from 559 readers who completed the 21-question online survey. The survey asks participants to weigh in on: current and future market conditions, new regulations, new business models, and other business practices and trends.
The results provide some sobering insight into where the market is going and how it will recover.
Click here to participate in the Roadmap to Recovery survey. Or click here to participate in the Future of Real Estate Commissions survey.
Fifty percent of those surveyed do not expect a housing market recovery until 2010, and another 40 percent do not expect it to recover until 2011 or beyond. Only 10 percent of those surveyed expect a recovery in 2009.
Eighty percent of those surveyed expect stable or lower sales volumes in their local housing markets next year, while about 19 percent expect real estate transactions to increase. And 14.7 percent expect national sales to climb next year.
The perception that local markets are performing better than reports on national housing conditions holds true in the survey. Or at least the results show that those surveyed believe that their market will outperform the national housing scene.
Survey participants were asked to respond to questions that looked at both national and local market conditions.
Thirty-eight percent of those surveyed expect lower sales volumes next year in their local area, but 58 percent expect national sales to be down in 2009.
Either way, the outlook for a recovery is not good for the coming year, according to the survey.
Only 9.2 percent of those surveyed expect home-price increases next year, while 41.6 percent expect a decline. The silver lining in the results: 50 percent expect no changes in prices next year, up or down.
A decline in home prices is among the obstacles to regaining economic health. Flat home prices would be better news, as many economists are predicting a dismal outlook for next year.
Comments in the survey supported the rather negative mood the industry has about the prospects of a near-term recovery. Some examples:
- "Prices will begin to stabilize in some markets in 2009 but increases will take three to five years."
- "Recovery may begin next year, but it will take at least five years to come back."
- "We will see the 'bottom' somewhere in first-quarter 2010, but it will take at least another two years to cycle through all of the short sales and foreclosures."
Some respondents offered parallels to past downturns. "It took 20 years for a return to the boom peaks in our market," explained one reader.
Indeed, what represents a recovery? Is it the end of falling prices, stabilizing sales volumes or a return to the go-go days?
Learn more about the Roadmap to Recovery project and how you can participate at Inman.com/Roadmap.
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Submitted by Shannon Ziccardi on December 1, 2008 - 11:31am.
The doom and gloom found in your survey is merely a reflection of what has been pounded into all of us by a media intent upon telling us just how bad things are. With a presidential race that was less than positive now behind us, I'd prefer to see our efforts towards restoring consumer confidence normalized. We continue to live in the most prosperous and opportunity-filled country in the world. It's high time we started acting like it and appreciating it!!
"A Quick Note"
www.aquicknote.net
Submitted by Mike Parker on December 1, 2008 - 2:31pm.
Mike Parker
mparker@theblackwatercg.com
It is always easier to predict continuing bad news than to make good things happen. All these "Chicken Littles" bemoaning the state of affairs are in danger of making their "predictions" into reality.
Here's reality: Your 2009 will be what YOU make it. Many agents are doing well, but they aren't the ones surrendering. Many markets are tough, but many agents are succeeding, still. If only these naysayers would quit the business and clear the way for those determined to make 2009 more successful than 2008, we'd have the recovery happening right now. A pox on all you negative thinkers! Watch out for flying acorns!
Submitted by Lynn Cromer on December 1, 2008 - 3:24pm.
I agree with Mike that its easier to predict bad news, which noone will remember when times turn for the better.
I think we Realtors need to be more optimistic and positive. We should let our lcoal newspapers know when houses sell, we can talk up the market and how well priced housing is now. It's a great time to buy and let's let everyone know that!
Lynn Cromer
Broker Associate
Coldwell Banker Residential Real Estate
lynn@lynncromer.com
Submitted by Robert A. Hulme on December 1, 2008 - 3:49pm.
The Doom & Gloom of the Housing market will affect a lot of people, many Realtors will go by the wayside, but there is still a lot of positives out there for the taking.
I agree with Lynn that by being more optimistic about the market and putting on a positve spin, that we all can help turn things around sooner. One thing I know for sure is that it won't affect me, the glass is always half full in my house.
Robert A. Hulme
Realtor, GRI, e-PRO
Prudential Utah Real Estate
www.UtahCountyRealEstate.us
www.UtahCountyHomes.ws
801-885-2586
Submitted by Sean OToole on December 1, 2008 - 4:26pm.
Perhaps it's possible to find a balance between optimistic and realistic?
For example, I for one am extremely optimistic that home prices will return to levels that are affordable for first time buyers and which provide reasonable returns for buy-and-hold investors.
And why is it that having prices rise to levels where they are out of reach for most is considered being "optimistic", while having prices drop to levels where people can afford to live without killing themselves or using unsustainable financing is considered pessimistic?
Finally, to those who think the media are driving prices down, I suggest grabbing a calculator, looking up median incomes in your area, and taking a minute to consider what folks can actually afford using today's available financing. You may find it a little harder to argue that prices don't NEED to fall in order to get back to a healthy, sustainable, real estate market.
Sean O'Toole
Founder / CEO
ForeclosureRadar.com
ForeclosureTruth.com
Submitted by Scott Gibson on December 5, 2008 - 5:54pm.
I'm optimistic that those that stay positive and focused will have a good year in real estate next year. I find it interesting that Sean's comment seems to indicate that its a good thing for the market to undergo such a dramatic downturn. Wild swings are not healthy for anyone or anything.
There are many affordable areas in the country to live, there were many before the downturn hit. Homes were made too affordable by the reckless lending practices encouraged by wall street greed and promoted by certain government mandates to insure everyone could afford a home. Prices don't need to fall to get back to a healthy market, sound lending practices and a healthy economy will do the job just fine if given the chance.