Tuesday, May 19, 2009

What high end home sales could mean for you......

The near future of the real estate market is a significant, if not the most important, concern for the majority of us. Yet, there doesn’t seem to be enough being done about it which could have a more immediate impact.

As a sports fan involved with real estate related marketing and advertising every working day, I continue to see how statistics can be used to make practically any point or argument seem valid. A baseball player could be leading the league in hitting, but if he only gets 2 hits in his last 20 at-bats, reporters will write about how much better other players on the team have done in that same stretch. It is another version of the “half empty – half full” concept which now seems to dominate real estate news.

I saw a story with information from The Warren Group stating that in the Greater Boston area, a total 174 luxury homes (priced $1,000,000 and up) were sold during the 1st quarter of 2009 alone. This should have been a much bigger story. I found this amazing and quite a positive. If more than one “million dollar mansion” per day has been closed, loaned upon, and sold, over a 3 month period in this economy, this shows me that some banks are willing to make significant real estate loans, buyers can qualify for them, and that motivated sellers can move a property at ANY price. After all, these are the toughest properties to find buyers for. To me, this information should be splashed across the front page, used in advertising and marketing materials from the leading real estate companies, and anyone within earshot of the local realty associations should be aware of this.

But, as things go in this “half full half empty” era, the Boston Herald story goes on about how this total is about half of what it was compared with a year ago. Boom. The air goes out of the balloon faster than a speeding bullet and more powerful than a locomotive. Here is the story:


I’m not here to attack the reporter. He is not the only one. But the negative publicity and the lack of fighting against it by people in the industry has got to stop for the sake of the economy. Seeing the number of high end homes that have sold in one part of the country this year should be an “OMG” story. Instead, it is shot down before you finish reading it.

This represents at least $175,000,000 into a regional economy. Realty agents, lenders, title company employees, appraisers, attorneys, and others, have been or are about to receive commissions or payments as a result of this business. The municipalities, counties, and state have generated significant tax dollars. It’s the feel good story of the year.

Instead, this story comes off as if it is another example of a terrible real estate market. Say what??

My home is not on the market right now. If it were, unfortunately for me, it would not be anywhere the million dollar range. Probably less than half of that. And if my home was sitting on the market right now at less than half that, I would be doing some research today. I would be finding out how many million dollar homes have sold in my area this year. If I find out it is averaging better than 1 a day (such as in the Boston area), I would actually be upset. Heck, even if it is 1 sold for every 2 days, that is pretty darn impressive.

Who would I be upset with? My realty agent, that’s who. I would ask her how there could be X number of qualified million dollar home sales during the time she hasn’t sold mine for less than half of that.

If your home is on the market, especially if it has been on the market for some time, a little bit of research could provide you with a lot of ammunition.

1 comment:

CoachingByPeter said...

By knowing your local real estate investing market, you're able to keep your finger on the pulse of your local community and to stay abreast of changes in trends, sales prices and rental rates. Knowing immediately about these changes is critical to your investing future.