My 2006 Updated Real Estate Predictions

It's now May...and I was curious to see how my predictions were holding up.

1) Our market will be "normal." Ok, you ask, "What's normal?"It's when homes go on the market and stay on the market for 30, 45 and 60 days, before sellers accept an offer. It's when buyers look at properties and get the opportunity to think about their offer. It's when prices stabilize or go down for the short term.

(New Naperville sub-division has 56 homes for sale...only ONE under contract. Another Naperville sub-division with homes ranging from $550,000 to $800,000, has had many of its more expensive homes reduced by $20,000, $30,000, $50,000 and even more. Yet, they're still on the market, unsold!)

It's also when a property that is a) clean, b) priced fairly and offers a higher commission or bonus to the selling agency and c) easy to show, will sell quicker than other competitive homes.

2) Mortgage rates will stay under 7% this year.The Fed will raise their 'over night' rate probably 2 or 3 more times this year. (Now, it seems like the Fed is moving to a 5.5% overnight rate. And, that's affecting the stock market.) Mortgage rates are based upon the Fed rate and the demand for mortgage money. Rates usually are lower in winter months as mortgage companies want to keep their business operating. Be careful with lenders.

Many borderline companies will fold. Expect to see fewer mortgage brokers doing business. And, remember if it looks too good, it probably is.

3) Decrease in membership in the National Association of Realtors.Many, many people got into real estate in the past few years with very little training. When the market becomes too difficult for them, they'll quit and go into something else. The turnover rate for agents, nationwide, approaches 95% within a two year period. (No change there.)

As an "old" agent...no, make that experienced agent, I've been active in markets where mortgage rates were 18%; where sellers paid up to 10 points to sell; and, where (no computers in those days) 90 days seemed to be the average closing time.

Can you imagine in those days we had little black notebooks with current listings. We had to manually change those sheets each day to keep up. A time consuming, boring chore!

4) Computers are here to stay.Over 74% of buyers used the internet (in 2004) to start their home search! (Now, the National Association of REALTORS came out with their 2005 survey, and the figure is 78%.) I think that we'll approach 90% this year.

The easiest way to find out about areas, prices and homes is to Google. And as the prices of computers have fallen, most people have one in their home. In fact, according to AARP, the most active group of new computer users are the over 55 age group. And you baby boomers who are thinking about retirement to a warmer climate, why you're doing on-line searches, aren't you?

The professional Real Estate agent today has to have the following basic technological tools to do business: cell phone, computer, digital camera, scanner, and printer.

What other tools we should have?

© 2006 Eileen B. Landau, Move UP to Naperville Blog