Market Slow Down, What?

We always get reports on what the market is doing. These reports come from NAR (National Association of Realtors) the MBA, (Mortgage Bankers Association), NAMB, (National Association of Mortgage Brokers), we get reports for Builder Associations, this association and that association. Sometimes I wonder who is really doing the numbers because sometimes it just does not really add up.

Most often these reports come from hyped-up press releases from Washington and with so much bad and biased news, I have to think what is real and what can I push aside as not quite there. What is the actual reason for the headline taken from a monthly or quarterly numbers report with facts or an editorial from the National Rag.

Here are some facts to always consider when reading these reports.

• The number of reported sales is most often very accurate.
• The number of homes on the market and the number of days from listing to closing or days on the market.
• The increase or decrease in average median sales price for your area.
• These numbers are important to know when buying or selling your home.

Most everything is just opinion or speculation from the writer or in my case, of my writings it would be refer to as ‘Martyisms’. So, here is my two cents from the seat of my chair in my office. Our average loan size is up this second quarter, our loan volume is up, our number of closed loans are up.

Now here are the negative changes we did see. The fight to keep a loan on a table came back into play for the first time in years. I looked into what may be the cause of this.

Let’s start with, there has been a major increase in new loan originators getting licensed and entering the market place increasing competition. Being new the only way they think they can work is by soliciting themselves as a discount broker. Anyone with experience will tell you, you get what you pay for and a discount often equates to a big headache in the long run.

Another thing is an increase in new realtors driving up competition for every new buyer out there. In our area there are over 4000 realtors and every month the area experiences about 400 to 500 sales. Hmmm, is everyone making any money or just a handful of professionals?.

The other part is inventory, inventory is a key piece here. Right now, we are experiencing a different kind of pressure in the marker. I have to wonder looking at the MLS ‘Is the number of homes for sale on the market down?’ No, then why does it seem like every home we are doing a mortgage for has a backup offer on it and the realtors are all pushing to close their transactions earlier then what’s in the contract.?

So, if inventory numbers ( the amount of homes on the market) are not down, yet we have buyers in backup offer positions, what’s really happening?

• Could the new tax bill be causing a market shift?
• Is there a change on where businesses and people are moving too?
• If people in states who have loss their state income tax deduction moving to states like Florida that do not have an income tax? This may explain why sales are slowing down in states with state income tax and why here in Florida homes have double offers on them.

Think about that for a minute. There are less people moving into New York than those that are moving to Florida. Think of the other states that may be experiencing this. Most people cannot afford two homes. So, they not only have to find a job in another state but need to sell their current residence before purchasing a new home elsewhere. Is this the real shift in the market place and not really a market slow but rather a shift in location?

What impact will this have on you?

Are you really well prepared for a move? Getting all your facts together before you buy or sell is crucial and you need to set your goals and prepare your financials. Ask questions and get the right answers not the sales ‘hoho’ and we will see you at a happy closing table