It was a bit of a whirlwind this week as I trudged through New York’s Time Square looking like I had misplaced my arctic expedition team and longing for the chilly 60-degree San Diego nights. It takes something pretty compelling to get a California girl to brave the elements, and the Inman Real Estate Connect conference always seems to pull me away from my comfort zone.
Black scarf to keep your neck from snapping like an icicle (the one that someone stole while I was moderating a panel session, none the wiser)? $14. Getting an opportunity to interview some guy named Craig who reportedly has a “list” of some sort? Priceless.
(A huge shout out to both Gerry “Realtyman” Bourgeois for snapping this picture that I could subsequent right-click, fair and square, from his Facebook page, and to Dustin Luther, social media guy extraordinaire and grand master of the live-streaming Spinnio booth where I enjoyed my fifteen minutes channeling Larry King.)
The big topics this Inman installment were social media and the prognosis for the real estate market in 2010. Since our three readers probably care a lot less about how I might effectively use Twitter to earn their business (@krisberg) and a lot more about the housing market, I will share my take-away on the latter.
In speaking with agents, brokers, and mortgage brokers from the left side of the country to the right, the general consensus is that the first quarter of 2010 is going to feel pretty good. After that, all bets are off.
The trepidation among industry professionals about the market beyond the first quarter (among the professionals who are studied and honest, at least, and not the one in the NAR ads who is leaning smugly against the white picket fence in the suburbs) is related to a series of upcoming events. We are staring down the barrel of a troika of potential game changers, a hat trick, a triple witch – uh, three things.
First up will be the Fed’s exit from the mortgage backed security shopping spree which has been helping to prop up an otherwise weak-kneed market. Once this happens, it is expected that interest rates will rise. Higher rates, all things being equal, mean homes are less affordable, so absent a real recovery environment, prices may feel downward pressure. At a minimum, pace of sales due to a smaller qualified buyer pool and waning buyer enthusiasm could slow.
Then there are the anticipated changes to the FHA underwriting guidelines. Increased minimum down payments, higher funding fees, and other changes yet to be defined will make one of our more popular loan vehicles today less attractive.
Finally, there is the little issue of the Homebuyer Tax Credit program. Get it while the getting is good; on May 1st, it will be a memory – probably for real this time.
Collectively, these three things mean that there is a window of opportunity for both buyers and sellers during the first quarter of 2010. Beyond that? It’s anyone’s guess, but mine is that we will slide into a 2009 redux, with sluggish sales and flat to declining prices in all but the lower price segments. And I sense that the buyers out there agree with me.
Yesterday I met some clients at the coming out party for a local new home development. This was just a previewing day; price lists aren’t even out yet. But, someone forgot to tell the crowd lined up into the street waiting for the pearly gates of the sales office to open about the recession. In San Diego, any reasonable detached home priced starting with a six or below is currently chum in the shark exhibit. Oh, the humanity!
But, back to that guy named Craig. I did take the opportunity to ask him a couple of “tough” questions. Was he concerned about Zillow’s entry into the rental classifieds market, I asked? “I didn’t hear about that,” he told me, showing as much interest as if I had just delivered a speech on the importance of the number “9” in long division.
What about that guy who keeps trying to rent my client’s home, the home that is for sale? “Did you catch him yet?” I pushed on. He told me that they don’t have any plans to address the rental scams, and explained that consumers are getting smarter and can generally sniff out the scammers. So there.
The egg timer on my fifteen minutes is up, so it’s back to work, back to the blog, and off to stock up on high-fat finger foods for the Charger playoff game. It’s good to be home.