Real Estate Darwinism

The real estate market today is fairly good in and around San Mateo.  While its not a hot market, it’s also not a drag the way it is across the bay.  If you are thinking about selling your house right now, it’s really important to avoid these 5 Deadly Mistakes.  Mistakes cost you money and they cost you time.  If you’re trying to sell your home, you have neither time or extra money to waste, do you?  No, I didn’t think so.

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Here on our Long Beach Real Estate site I usually write purely real estate related articles targeted at educating and informing buyers and sellers of Long Beach Real Estate. Today I would like to give you a little peek into the business side of things and explain how they can affect the sale or purchase of your Long Beach homes.

In a recently published post I disclosed the 2008 closed sales in Long Beach; 674 of them, through 4/30/08. While the chart shows the sales increasing each month, the sales figures are still very low. (Includes sales of homes, condos, lofts, co-ops, Oyos, 2-4 units and 5+ units as recorded on the MLS)

• Jan 130
• Feb 153
• Mar 179
• Apr 212
• Total: 674

These are difficult times for those of us surviving in the real estate industry. Going into this down market there were about 2900 licensed Realtors on record, there are currently about 1600 licensees active in the Long Beach area. Every market will support a certain amount of agents based on the closed sales of that market. Each agent needs a certain amount of closed sales in order to survive. Lets assume that 8 to 10 closed sales for the year are required for a Realtor to even survive this market; 674 closed sales would produce 8 to 10 sales for the year, for between 200 and 250 Realtors. Those sales are currently spread across 1600 current licensees, which would equate to less than ½ of a sale for each Realtor for the first 4 months of 2008.

In the real estate industry we have an 80/20 saying. It states that 20% of the agents do 80% of the business. 20% of 1600 agents = 320 which would equate to about 2 closed sales for the majority of the 20% still doing business.

So how are 1600 Realtors surviving a market with sales that will currently only support 200 to 250?

• Some have other income, or a spouse or significant other with income.
• Some have taken on Part or Full time jobs, while trying to juggle their real estate.
• Some have anticipated this market and made plans to survive it.
• Some are making enough sales to manage.

What of the 80%? That is 1280 agents, still active, for the last 4 months. How are they surviving with little or no sales? Well, they either have spousal support a trust fund or they have accepted salaried positions. Lets take a look at that. Real estate is a more than full time job; it is a commitment which permeates every hour of every day of our lives. Real estate transactions require a lot of attention on a daily basis. Escrow, title, lenders, inspections, appraisers banks and more need to be attended to, mostly during normal business hours. Buyers need to see properties around their schedules which often means after work or weekend showings. Sellers properties often need tending, flyers run out; keys go missing from a lock box or end up in another box on the same property. A pipe may burst on a listing with an out of town owner; anything can happen. How is an agent who has accepted employment elsewhere, with a set schedule, going to be able to deal with the schedule and responsibilities of a full time Realtor? How does that affect the buyer or seller? Has the agent even disclosed to the buyer or seller that they are not fully available? Do you know if your agent is available to conduct business, full time on your behalf?

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We all know the acronym KISS means Keep It Simple Stupid and if you keep that in mind, you will find that organizing your home really can be simple if you break it down into little pieces.  Ive talked about reducing clutter before, and I think one can never repeat this too often.  Perhaps Im talking to myself, or my life partner Alex here, but organization is something we all need.  If your house has become too full of too much stuff, its time to take stock of it and begin the process.

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This is one of those things that sounds like a bad joke - until you realize that the person that you’re talking to ISN’T kidding!

Client: “I think I’ll take my home off the market for a little while.”

Me: “Why is that? Have you changed your mind about selling it?”

Client: “Oh no, not at all - I just think that taking it off the market will ________________________________ (fill in the blank with flawed logic).”

Makes absolutely no sense.  There is still quite a bit of Palm Beach Gardens real estate for sale so the only thing this temporary change does is remove ANY chance you have of getting an offer!

Some Sellers think that this is sort of a tease - as if the people that have been tracking their ‘one-in-a-million home’ will feel like they lost out and they need to spring to action!  Not at all.

If the inventory levels were low, this might not be so laughable.  But if your home falls off the list, any potential Buyer will just move on to the next AVAILABLE one.

Remember this - we are still in a Buyers Market and misguided Seller ‘tricks’ like this (and the equally poor ‘Price Increase’) only hurt your chances of selling your home.

Long Beach California Real Estate Sales Update

January - April 2008

The real estate market in Long Beach has begun to shift.  We have witnessed a steady rise in homes and condos for sale in Long Beach since the beginning of the year, as is witnessed by the chart provided.  Buyers who have been waiting out the real estate market hoping to get that incredible deal are now buying those Long Beach homes and condos they have been wanting. 

Interest rates are still great, although lenders are tightening up on lending standards.  It is getting more difficult to procure a home loan unless your income and credit scores are high, your credit history is good and your debt ratio is low.  As we progress into the summer months lending standards will become even more stringent.   

• Long Beach Mortgage Rates Reports

If you are one of the consumers who has been sitting on the sidelines waiting for Long Beach real estate prices to drop before you begin your buying process, you might want to speak to a mortgage lender pretty soon.  Run your credit, find out if you qualify for a home loan sufficient to make that purchase.  You may also decide to go ahead and buy now while Long Beach prices are low, some concessions are still being granted and home loans are still available to consumers with less than pristine credit. 

• Long Beach Homes & Condos-7 Steps to Pre-Home Purchase Preparedness 
• Buying Your Long Beach Home - Getting Started 
• Long Beach Home Search-Where do I start? 
• New FHA Loan Limit For Long Beach Homes
  
• Long Beach Homes - To Buy or Not To Buy? 
• Long Beach Homes and Condos - Negotiating Your Offer 
• Long Beach Home Ownership - 1st Time Home Buyers and The American Dream 

 Real Estate Sales in Long Beach California - 2008 - Year to Date

• Long Beach Homes and Condos Market Report-Jan-Dec Home Sales 2007 
• Long Beach Income Property Market Report-January-December 2007-Including Signal Hill 
• Downtown Long Beach Stock Co-operatives 

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