In 2006, I was the Vice President/Regional Sales Manager for a local independent real estate company. In my role it was asked of me to review a file for an agent, and to counsel a buyer on their home buying decision.
The buyers were insisting on buying a house beyond their means utilizing a nearly zero down loan program with a very low qualifying rate. He was a police officer, and she a teacher, both exceptional professionals. They easily qualified for a price range that made the most sense within their fixed income, yet they wanted to roll the dice in the hot real estate market - with little concern about what would become a rapidly increasing mortgage payment.
Their idea was the same as many at the time, ride the market up, sell in 18 – 24 months, take the new-found equity and buy a smaller property. Their logic was a higher priced home appreciating at the same rate as a lessor priced one would yield them more equity. My advice (which they chose not to take) was to not go through with this plan.
In September 2008, the bottom began to fall out of the financial markets. Congress rejected the idea of a bank bailout for the widespread financial failure that was occurring as great companies like Bear Stearns, Merrill Lynch, JP Morgan, etc. either got brought to their knees or knocked out altogether.
During that time, I was part of a team that pended a sale for more than $3,000,000 in North Orange County. That sale would fall through, and the house would sell many months later for far below $3 million, down to nearly $2 million.
What does this say about today? The housing market is experiencing slowing sales vs. the same period last year, growing inventory, rising interest rates vs. last year, and so on. When you study independent data, you can see evidence of some real estate companies in the OC being down -10 to -63%, and yet others are growing.
Is the market correction coming? YES!
Are people going to need to buy and sell real estate when the correction comes? YES!
With that in mind, does the market hold enough opportunity for you to sell
5, 10, 20, 100 or more properties a year? YES!!
Knowing enough to be successful whatever the market throws at you is the key. We have seen many market cycles and believe that higher interest rates will require better ideas to market properties while delivering clear communications to the clients/customers regarding real opportunities.
As to the buyers who refused our counsel? Unfortunately, their house was lost in foreclosure in late 2009. They qualified for legitimate loan programs yet wanted to accelerate their process through the American dream of home ownership.
Whether you are a real estate agent looking to move companies, or a real estate seller, buyer, landlord or tenant looking to lease, we can help you, and do it with experience and hospitality.
- Blake Vartanian
When it comes to real estate, not all companies are created equal. Blake Vartanian, as Chairman, along with his wife, Joanne Vartanian (CEO and President), and their Executive Team; Mary Walters (Vice President/General Manager), Barbara Wayne (Broker of Record), and Zantine Greenwood (Chief Information Officer), Realty Pro 100 has the foundation to support your hospitality focused real estate experience through our dynamic sales team.
For more information please contact us via e-mail.