CommentaryMarket March 30, 2012

My Friend is an Agent and She Says the Market is Great

Some of my colleagues are funny bunch. They decry a Zillow Zestimate for being inaccurate. They shake their heads when an agent licensed in Illinois gives real estate advice in Trulia Voices to a consumer in Florida, where the laws are different. They shake their head disapprovingly if you mistakenly mark a home as having a walkup attic when in fact it is a pull down stair attic.

And then, in a social situation, when asked how the market in Westchester is doing is by a friend or acquaintance, they step in it.

“The market is really heating up!”
“I think things are turning around!”

My personal favorite, advocated by the seminar gurus is “Unbelievable!” because it is ambiguous enough to mean anything. But there is a clear knee jerk reaction in some agents to become fountains of ebullient enthusiasm when asked about market conditions, as if their cheery outlook will snare them an easy deal. It won’t. It may snare a listing or a looker, but overpriced listings and lookers who don’t buy are not deals.

The truth is that every spring the cyclical nature of our industry kicks in. The holiday season is lower in activity for obvious reasons. The spring is busier because more people want to be moved in and settled by the summer. So springtime is, by comparison, busier than it was 90 days prior. But that is like saying we should build an ark every time it rains. When retailers evaluate a Christmas shopping season, they compare it to the previous Christmas, not the July before. If we are evaluating this March of 2012 in the Westchester real estate market, the only valid comparison is with March 2011. That’s just how it works. If you are an agent and you are busier now than you were in December, that isn’t a turnaround in the housing market, it is you showing up for work in the spring.

I could care less what people say when they chit chat. But it undermines our status as a reliable source of information when our eyes glaze over at the site of tin foil. Agents hate bad information online because it makes their job that much harder when Zillow says a $500,000 home is worth $435,00 or $620,000. Our job is challenging enough without having to overcome an agent’s bad advice given online to a consumer in another state. So why do some agents shoot themselves in the foot with syrupy market opinions when asked?

Lest you think I am being a parade rainer oner, here are some facts courtesy of the Empire Access MLS:

In the first 90 days of 2011, there were 704 single family homes closed in Westchester at a median price of $554,000.
In the first 90 days of 2012, there were, as of this writing, 717 homes closed in Westchester at a median sale price of $505,000.

Which means that volume is up an anemic 2% and median price is down 9%. Prices are now down to to about the median of the second quarter of 2002.


And in that quarter, there were over 1500 closed sales.

I have an uphill battle when a client wants to list their home at a higher price because someone told them things are looking up. Listings that start out overpriced end up chasing the market-unsold and stale.

Consumers: Don’t ask for opinions. Ask for facts. All real estate is local. And the local market is unique.

Agents: Don’t be afraid to just tell the truth. People want the truth, not spin or the party line. Life is so much easier when you just tell the truth. And it is far harder when you don’t paint an accurate picture.