This week, local real estate company Intracoastal Realty invited a national residential real estate expert to share his projections for the market at the company’s annual awards breakfast event.
This was New York-based speaker Steve Harney’s fourth year to present to Intracoastal Realty. About 250 agents and staff attended the event.
“When you have a real estate market as volatile and challenging as this one is, we want our agents to be loaded with the best information they can get,” said Jim Wallace, president of Intracoastal Realty.
From listening to projections made by Bank of America, Fannie Mae and Wells Fargo, Harney predicts a flood in the market of distressed properties nationwide in the second quarter of this year. As a result, home prices will drop by 5 to 8 percent in this market and will not return to today’s pricing until the end of the year, he said.
“[Moreover] we won’t see appreciation from today’s value until we move into 2012,” he said.
More inventory means more competition among sellers, which will further emphasize the importance of pricing when selling a home. Harney distinguishes between a competitively priced home and one that has a compelling price.
“A house that is priced at a compelling price, when a buyer walks out, he doesn’t say what other houses do you have to show me, he asks are there any other couples who are about to see this house,” he said.
But, price is not necessarily a buyer’s only concern. He pointed out that while price is a seller’s primary concern, monthly cost is a buyer’s main concern.
Real estate agents can educate their buyers that the low interest rates make now a good time to buy.
“If prices are falling but interest rates are going up, waiting might wind up costing you money rather than saving you money,” he said.
In terms of lessons learned from real estate market boom and subsequent crash, Wallace, who founded Intracoastal Realty here in 1976 said, “I guess if you learn something from that is next time when you see things move up that quickly, maybe pulling back and being a little more cautious would be prudent.”
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