Let me back up a bit- started the day by yelling at my sleeping husband- he kept me up all night (midnight! that is just not right!) reading and so I yelled at him when I got up "I don't want to get up right now". I think he just rolled over. I did get up though, for what I'm going to start calling bootycamp because "it" needs some "toning". Damn the things that stick with you. Well, I half-assed it today, I will admit. I was in a funk from no sleep, so sometimes you just do what you do to get by. It still hurt from Tuesday and it hurt even though I still half assed it. Wanted to puke during the squat holds... Moving on...
So getting back to Real Estate related topics, here is what I am finally grasping. The market has changed. It will never be like what it was before. I'm not saying it will never be a Seller's market again, I'm saying the underlying structure of financing, escrow, title, trustees, etc. has new rules and they are changing daily.
Sometimes, people that hang on to the past and are resistant to change are characterized as "crabs". Well, and I don't want to be a crab for many reasons. I embrace change and look for opportunities. I heard a quote from a guy named Matthew Kelly: "Change only takes place to the extent we develop new habits". Sounds simple and it is.
Terry Heffner of Guild Mortgage gave a great presentation on Wednesday on what he calls a S.W.O.T. analysis, which stands for Strengths, Weaknesses, Opportunities and Threats, in relation to the Real Estate and mortgage market. Here is what he shared.
Strengths:
1. Historically low mortgage rates
2. Low home prices
3. New financing programs daily
Weaknesses:
1. The fundamentals of the current economy are really, really scary (yeah!)
2. Foreclosures continue to plauge our markets and push home prices lower
3. Stimulus package money will move our economy to a more "socialist" system (which I disagree- read this great Newsweek article first: http://www.newsweek.com/id/188154)
4. Rates will be low for a while but could shoot up (again, I have heard this for years, but... I am not the fed or the crystal ball of the bond markets)
5. Unemployment is up and could get into double digits
6. Incomes continue to drop which means home prices will continue to fall.
Ok, so there are a lot more weaknesses in this report. BUT! Do not lose hope! Here are the opportunites!
Opportunities:
1. Our economy is forever changing and the wealthy made their fortunes when times were tough. Record mortgage volume in 2009 is coming! 2 trillion with about 56% of that being refinancing.
2. Stimulus package and tax incentives are here to help now.
3. First time buyers will lead the recovery in our industry. The Echo- Boomers (1982-2005) are the largest group since the baby boomers. This is the era of collaboration with this group: education, counseling and credit repair. The trophy children...
Threats: (almost done!)
1. There will be some near term gain as a result of low rates and 900 billion in tax money. It will be important to not "chase" markets and focus on fundamentals.
2. Then bust is always harder than the boom- it will not be easy as we downsize our economy and we need to be diciplined.
3. We will be working harder for less but this will not last forever.
4. The recent retraction of lending and lack of availability of money- we need to understand all program guidelines, grants and government programs.
5. The tax incentives have been designed to temporarily soften the blow but will be phased out by the end of 2009. (Contact me if you would like a helpful tax credit information sheet)
On the 16th at 10 am I will be attending the Breakfast Club Speaking Series at Pioneer Title to hear Todd Lindsey, a very successful entrepreneur speak on credit markets, TARP and the Senate finance committee. Todd has been in DC and will have a lot of great information to share and I, in turn will share with you.
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