You may have been hearing chatter in the news about home prices starting to rise. This could be the case in some markets, particularly those that were hit the hardest like Nevada, Arizona, and Florida. In these markets home prices were so depressed there was no way to go but up. However I have not seen prices rising in the New Bern area although they seem to be stabilizing and personally believe we are close to the bottom of the market. Homes are currently selling at around 1999-2000 price levels.From 01-01-12 through 12-22-12 there have been 951 homes sold in New Bern-Craven County. This compares to 930 during the same time frame in 2011. A little bump and certainly I welcome any positive news. During the same time period in 2011 there were 249 distressed properties, (bank owned, foreclosures, short sales), sold. In 2012 there have been 227 distressed properties sold, almost a 10% decrease. However, in Oct., Nov., Dec. 2012 saw a 17% increase in distressed property sales compared to the same time in 2011. It is impossible to have a housing recovery as long the rate of distressed properties sold is increasing. Lets hope the trend of the last 3 months ends soon.In 2012 distress properties comprised 24% of the home sales in the New Bern-Craven County market. Even though this is an improvement over 2011, (27%), in a healthy market this number probably would be in the 2-4% range. Nationwide distressed sales comprise about 25% of sales so were are not any worse than most areas if that makes you feel better. Lending guidelines were tightened up after the mortgage crash in 2008 and in the long run this will result in a decrease in foreclosures and ultimately help stabilize housing prices.We have a long way to go, however, it appears we are moving in the right direction. We need for the economy to start improving and producing private sector jobs before we see home prices rise. Each year our population is growing and with that more folks are coming of the age to buy a home. There is undoubtedly a pent up demand for housing out there lurking and what is missing in a in a strong housing recovery are good jobs.Homes sold in 2012 by price range,$1000-$50000=97
$50001-$100000=183
$101000-$150000=245
$150100-$200000=258
$200100-$250000=134
$250100-$300000=53
$300100-$350000=20
$350100-$400000=19
$400100-$450000=8
$450100-$500000=3
$500100-$550000=4
$550100-$600000=3For homes over $250,000 there is about a 21 month absorption rate. In other words, expect it to take 21 months to sell a home in this price range unless a home offers something unique. Retirees use to be a large portion of the buyers in this price range. Because they had to sell their homes at a reduced price to move here they are now buying less expensive homes. Active duty military officers use to buy quite a few homes in this price range as well and now many now are opting to rent. All this makes for tough selling conditions for homes over $250,000.If you have any questions about any particular price range or even sales in a particular subdivision let me know. I hope everyone has a blessed Christmas.
Real Estate Education Enhances Transparency, Professionalism and Business Volume
Property broking profession lacks credibility and is always looked at with suspicion. However, the credibility of this profession can be enhanced through real estate education. A thoroughly planned system of property education can not only improve the credibility of property professionals by inculcating numerous changes in the profession but also enhance the business volume of educated and certified professionals. Suitably planned courses can teach property professionals the better, profitable and convenient way of doing real estate business. Few of the key changes that education system can bring into property market are as follows:
Transparency in transaction and business professionalism: Knowledge enhances transparency and professionalism and this is true for real estate market also. Today, several property brokers are active in the market without any structured knowledge of property sales and transaction process and therefore they are forced to provide wrong and partial information to their clients. They are not able to close the deal properly, mostly at the cost of prospective home buyers, because they have not studied how property ownership is verified, acquired, transferred and leased. In the Indian property market, there is a sub set of property advisors, who want to upgrade their knowledge and skill but are unable to do so in the absence of a system of real estate education in which they can study as well as run their business.
In this scenario, a proper system of property education and training, consisting of a network of real estate institutes offering full time, part time, evening, week end, distance and online real estate courses, could have improved the subject knowledge of professionals and in turn would have improved transparency in property transactions and professionalism in the business, especially property consulting business. A point to be mentioned here is the initiative of EduMark realty education services which offers courses for those looking for real estate jobs as well as for existing property professionals looking for professional development. EduMark is the first and only institute in India that offers full time, part time, week end, evening, distance and online courses.
Customer Service Efficiency: A knowledgeable and informed property advisor can serve his clients effectively and efficiently which in turn increases his demands in the market. Such demands increase his overall volume of business because one satisfied customer can create ten new customers. However, structured knowledge and information come only through a properly established process of education.
Subject knowledge and business volume: It is an established fact that buyers tend to prefer a knowledgeable advisor (knowledge displayed through his educational qualification) more than that of an advisor who is not well informed and knowledgeable. However, in the absence of property education system, courses and institutes, property brokers can’t display their knowledge because they can’t acquire any suitable real estate qualification and therefore potential home buyers can’t identify the best suited advisor.
Business ethics and business volume: By offering fraudulent advice, one can derive benefits in short term but it is a net loss in long term. This is very true for property brokers also. This is because, as mentioned above, one satisfied customer can create ten new customers but one dis-satisfied customer can dissuade hundreds of potential clients, so the losses are many folds. However, this fact can be explained to these property consultants only if they are inclined towards learning and there is sufficient opportunity for such learning.
Real estate jobs and cost of recruitment and training: One of the most important impacts of education in this business is on property jobs; While real estate courses offer a platform to potential candidates to start their career in real estate by taking up suitable property related jobs, it reduces the cost that employers make on the training of new employees. Those candidates who have done a property related course are already trained and ready for real estate jobs and therefore employers do not need to arrange fresh training of the such employees, which saves time and money both.
Overall, a proper devised system of education for Indian property market can enhance not only the transparency in transaction and business professionalism but also the business volume of the market players. Another advantage is the reduction in training and employee orientation cost.