When interest rates started rising last year and homes sales started slowing, we heard a lot of reassuring talk from the fed and various economists about a so called “soft landing” for the housing market.
Well, if this is a “soft landing” for the housing market, let me be one of the first to announce, IT DOESN’T FEEL VERY SOFT! At least not from the perspective of many Northern Virginia Realtors and homeowners. Some Realtors are looking for part-time jobs and, in some cases, leaving the field altogether. Don’t get me wrong. I’m not suggesting we shed a lot of tears for Realtors. This is the nature of the business and those that can adapt and survive will learn some valuable lessons and end-up stronger in the long run.
Similarly, many homeowners in Norther Virginia who enjoyed double-digit gains and profits on their homes when they sold, are now in the position of having to reduce their prices and make other concessions in order to sell their home. Not to mention the predicament of people with adjustable rate mortages.
This is the price that needs to be paid for the excessive growth in the housing market in the past few years. When the pendulum swings too far in one direction, it’s sure to swing back.
My real point is that, we need to face reality and decide on a strategy to effectively deal with the situation from our own perspective as a Federal Regulator, Realtor or homeowner. Denial won’t help.
The reality is that in many areas of Northern Virginia home prices are not stablizing. They are dropping.
Federal regulators who are responsible for making decisions regarding our economy need to get out in the “field” and take notice of what’s going on. It’s not all a numbers game. There are real people behind those numbers. They need to be aware of how we are all affected by this “slowdown”, what we are likely to do about it and what are the consequences of our actions on a national scale should we collectively reach a “tipping point’.
As Realtors, we need to tell homeowners the truth and not continue to provide reassuring advice that is based on wishful thinking. At some point it isn’t credible to keep telling people that home prices are stablizing or that we exepct a “soft landing” while we are reducing prices $50,000 – $100,000 in order to sell them.
As a homeowner, you need to decide on a strategy to realistically price and sell your home now or hang-on and wait the market out. How long ? Who really knows! I would plan for a few years at least.
Of course, if you are a hombuyer, let’s talk!