Blog

OK. You Win. Stop Listening to Real Estate Agents!


Each day we attempt to give truthful insight on the current housing market. If we report what is perceived as negative news, some in the real estate community come down on us hard. However, when we explain that we think now is a great time to buy, we get an avalanche of feedback from the general public attacking us for being nothing more than puppets for real estate agents across the country. Today, we don’t want you to listen to what we think about the opportunities that exist for buyers in this market. Instead, we want to report on what some members of the investment community are saying.

The Wall Street Journal

Jim Woods wrote an article earlier this year for Market Watch, part of the Wall Street Journal’s digital network. Its title: Why your best investment is a house. Mr. Woods compared the investment potential of real estate against other asset classes such as stocks and precious metals. Here was his conclusion.

One reason your best investment right now could be a home has to do with the relative upside of getting in on an asset class while it’s at the bottom versus buying into other asset classes that could be near a top. Consider for a moment the tremendous upside we’ve seen in stocks, precious metals and agricultural commodities over the past 12 months…

If you’re a long-term investor looking to put money to work, now is not really the best time to get into any of these three asset classes. However, with home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today…

Mr. Woods went on to talk about the financing portion of the purchase:

Yes, mortgage rates still are near historical lows, but if we see these rates rise, then the cost of a new home could climb significantly. So, now could really be the best time to pull the trigger on that home purchase — and it could also be your best investment right now.

Fortune Magazine

Shawn Tully, senior editor at large for Fortune penned an article last week which was titled: Real estate: It's time to buy again. In the article, Mr. Tully explained:

Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.

Let’s state it simply and forcibly: Housing is back. Two basic factors are laying the foundation for dramatic recovery in residential real estate. The first is the historic drop in new construction ... The second is a steep decline in prices, on the order of 30% nationwide since 2006, and as much as 55% in the hardest-hit markets. The story of this downturn has been an astonishing flight from the traditional American approach of buying new houses to an embrace of renting. But the new affordability will gradually lure Americans back to buying homes. And the return of the homeowner will start raising prices in many markets this year.

Bottom Line

Neither of the two media sources mentioned above has ever been accused of cuddling up to the National Association of Realtors. However, both have come to the same conclusion. It’s time to buy real estate. Perhaps we should listen to them.

Share

About The KCM Crew

We at The KCM Crew believe every family should feel confident when buying & selling a home. KCM helps real estate professionals reach these families & enables the agent to simply & effectively explain a complex housing market. Take a 14-Day Free Trial of our monthly membership to see how we can help you!

42 Responses to “OK. You Win. Stop Listening to Real Estate Agents!”

  1. Dewey Linville April 5, 2011 at 9:08 am # Reply

    KCM Crew,

    To help balance the response. Thanks for the BLOG. Buyers and Sellers alike are weary of being told things that realtors think they want to hear rather than things they need to know.

    Dewey

  2. Darryl Baskin April 5, 2011 at 10:02 am # Reply

    The facts will always benefit someone in the market. It is a real estate agent's duty to help people understand how they can benefit from or protect themselves in current market conditions. This article addresses that. Nice job!

  3. David Mott April 5, 2011 at 10:24 am # Reply

    When houses are selling for less than the cost to purchase the property and build that house, then it makes no sense to wait for the bottom. There's the supply and demand story, but just using basic economics is all one really needs to decide when to buy.

    I think that the bigger picture in real estate isn't that homes are or are not affordable, it's that the unemployment number in the media is way out of whack with reality. In my opinion, there just aren't enough qualified buyers. Sure, there are a few cash buyers out there, but most folks use a mortgage.

    There are no (significant number of) jobs for the unemployed, no jobs for the new degrees, no jobs for young or old folks. There are no jobs that allow a mortgage payment and a car payment. Forget health insurance.

    As more folks decide to be foreclosed on and live in their home for free for as long as they can, they will join the ranks of this growing army of unqualified buyers. Let's hope that this slice of the American Dream pie will stay small.

  4. ryan April 5, 2011 at 1:34 pm # Reply

    People, investors or otherwise, want the truth. They don't want spin and manipulation of numbers. The biggest problem is nobody knows what skeletons are in the closet. More short sales, more shadow inventory, not to mention the countless failed government programs that have only delayed the inevitable. The truth is, all of these projections are just guesses. If the government would get out of the way and quit trying to "fix" the market, and banks would get foreclosures and short sales cleaned up we can get a true bottom. Investors and home buyers would gain confidence that the market is real and sustainable.

  5. Matthew Ferrara April 5, 2011 at 2:09 pm # Reply

    One of the problems is that people want the "final answer" to something called a "market" which isn't fixed in time or condition. They also dont understand that the same property can be a good deal for someone, while also being a bad deal for someone else. Same with markets. If I have no mortgage, selling in a "down market" may still be a great deal. If I have some cash to invest rather than pay a capital gain tax, buying into the same market makes sense. There is no "truth" to the market. There are many " truths" that make sense for individual situations, individual properties and individual moments in time.

    That's called a market. We have spent a decade trying to create a single "always answer" for housing consumers and forgotten that the attempt itself is misguided. That's why we need multiple voices and then can only make a decision that works "for me" at the time.

  6. Sandy Smith April 5, 2011 at 2:15 pm # Reply

    Thanks for the opportunity to share with our clients; I never worry about anything you send, because everything you have ever told us has pretty much "come true", even with the dating of events to happen. This certainly helps support us when our customers and clients get information from a credible third party. We appreciate you!

    Sandy and Bob Smith

  7. Jason Korn April 5, 2011 at 4:21 pm # Reply

    It's true that many people look at us as "used car salesmen" (no offense to used car salesmen). As if we're only looking at our clients as dollar signs. I too find myself getting frustrated by those people's jaded opinion & negative energy. What I've come to notice is that ANYONE who has gotten to know me as a person (my clients), realize that I personally, am anything but that. The people I enjoy working with always see past that stereotype & realize that I have nothing but their best intentions in mind. Those are the people I want to work with anyways.

    Loved the post. Thank you!

  8. Tony Green, Winston Salem Realtor April 5, 2011 at 5:13 pm # Reply

    Love the articles you guys post. You're really a great resource for finding pertinent industry information. Like Warren Buffett said recently, there is always uncertainty, but don't let uncertainty spook you. If you can afford to buy a home now, and you're not, years later you're going to look back and wish you had. Don't be woulda, coulda, shoulda, and filled with regret. On the other hand, don't try to buy too much house. Buy what you can afford and be content with that.

  9. Pamela April 5, 2011 at 6:19 pm # Reply

    I don't think it serves the public well to talk about home buying strictly as a financial investment. A home is a place to live and to nurture your family. Yes, you want people to make decisions that will benefit them financially. But most people buy homes because they want to be homeowners. And then try to justify their heart's desire by telling themselves it's a good investment.

    People should buy homes when they can afford them and it's a good decision for them.

  10. Sunday Stephens April 5, 2011 at 6:55 pm # Reply

    You have helped me to turn my shoppers into buyers! Thank you!

  11. Nelson E. Santiago April 5, 2011 at 7:05 pm # Reply

    It is always surprising how intelligent people can take a look at the same evidence, the same numbers and come to different conclusions. I happen to be a Realtor in Las Vegas specializing in investment property. One of the most frustrating things for me is to "de-program" people regarding all of the misinformation there is out there. Here are some facts; "57% of all purchases in Las Vegas in the month of February were done in cash! Of those 53% live in Nevada almost all of them in Clark Country or Metro Las Vegas. When all sales are calculated, 16.7% were from California, 17.3% were from other states and countries." (Andrew LaPage MDA Data Quick)

    Las Vegas has some of the newest infrastructure of any city in the country. Over half of the housing stock was built after 1996 which is great for investors because of less major maintenance & remodeling. While presently unemployment may be high, it is very inexpensive to live here compared to any Metro area in most country and their in no state income tax. If you have a job you can do from anywhere in the country es pecially a home business or a virtual data, software or underwriting business, Las Vegas is an excellent choice for the money. The down side is that there is no ocean.

    I find that investors who have a specific target ROI (Return on Investment) or ROE (Return on Equity/Cash on Cash) can actually make better decisions. Ask the question, what is your "minimum" percentage of rate on investment you want excluding appreciation? Is it 8%,10%, 12% or more? If the numbers tell us that you can obtain that kind of return using current rental market data for the subdivision will you make a decision? Out of state Americans for the most part aren't sure because they don't know what value looks like in Las Vegas compared to their state and neighborhood. But those who live here get it. So do foreigners, and they pay cash. Good decent rentals are booming in Las Vegas and for those who want to buy, you can buy for less than you can rent, even if you are using VA with no money down. I am sure there are other areas of the country where investors are also doing their homework and not just listening to the news for their information. The financial news "experts" from New York don't know the local markets like locals do, period. They don't live here.

  12. Jim Flanagan April 5, 2011 at 8:32 pm # Reply

    I heard that SNOOKI and one of her male co-stars recently purchased homes here on the real "Jersey Shore"...maybe the public will buy that...like they did their books? Just a little levity from from your friends "down the shore". Keep the unbiased truth coming!

    Jim

  13. Eric April 5, 2011 at 10:31 pm # Reply

    The simple truth is that we the people of this great country have been Sold a mirage for the past 15 years, at the expense of a materialistic attitude. One that made people look at a home purchase as an entitlement, and virtual ATM.
    The future of of Real Estate, and the hard lesson learned over the past 6 years will settle in the minds of the majority for decades. Inflation and the lack of increasing incomes will cripple thousands if not millions of peoples desire to own a home. The fabric of the majority do not have the constitution to understand the difference between home ownership and residing in a dwelling.
    Good luck selling the McMansions around our Country. We've over indulged ourselves on a freudian ideology that been swept away in the wind.

    Savy investors will get it, and make a killing on those weak hearted souls who choose to play it safe and rent the rest of their lives

  14. Billy April 6, 2011 at 10:08 am # Reply

    I'm a realtor, I have invested in three more properties in the last year. I put my money where my mouth is.

    If your stock broker shows you he invested $10k of his own money into a stock he had confidence in, wouldn't you feel more comfortable investing in the same thing?

    If your doctor used a specific brand of stent in his mother's heart, wouldn't you want the same for your mother?

    Oh, by the way, I'm closing on property number four in two weeks. Wake up folks, this IS what you call BUYING LOW and then down the road SELLING HIGH.

  15. CoMortgageResource April 22, 2011 at 3:34 pm # Reply

    This article has so many great points for home buyers and there are some important considerations brought up in the comments. There are an endless supply of blogs/websites, etc. and people get bombarded with information leading them to believe they can take care of listing and selling their own house. Especially this month, I would compare it to having a good tax professional. Sure a person can prepare their own tax return, but how much could they have saved had they went to a tax professional who knew the tax laws? Thanks again for the post - I'd love to incorporate it into a blog on the First Time Home Buyers Blog on my website http://www.comortgageresource.com. Thanks for the information!

  16. CoMortgageResource April 23, 2011 at 12:47 pm # Reply

    Enjoyed your post so much that I incorporated it into one entitled What to Do? What to Do?. I hope you think I did yours justice! Thanks again for the info!

  17. Ben Ganje May 13, 2011 at 11:34 pm # Reply

    These sources should make anyone stand back and understand the importance of the current timing within the market. I took some of this and added it to a blog i have written: http://the-sexton-lofts.com/2011/05/14/what-is-motivating-the-downtown-buyer/. Great work KCM Crew!

Trackbacks/Pingbacks

  1. Living on The Edge · Pall Spera Company Realtors Blog - April 5, 2011

    [...] you have read today’s Blog post by KMC, posted earlier on our Facebook Wall, you might understand how I feel when I gather information [...]

  2. OK. You Win. Stop Listening to Real Estate Agents! « brockportrealestateblog - April 5, 2011

    [...] OK. You Win. Stop Listening to Real Estate Agents!. from → Uncategorized ← Video of the Week LikeBe the first to like [...]

  3. Do Not Listen to Real Estate Agents? | Montague, Miller and Company Blog - April 5, 2011

    [...] That was the headline-can’t believe we are posting it here, but wait;  here is the problem:  When the National Association of REALTORs posts an upbeat housing article it is said that the information must be suspect-obviously we want the news to be upbeat.  So now the Keeping Current Matters team/Steve Harney is commenting on the obvious by posting-Don’t listen to real estate agents…LISTEN to the Wall Street Journal which says NOW IS THE TIME TO BUY.  Don’t listen to real estate agents listen to FORTUNE MAGAZINE which says that now is the time to BUY.  Please read the whole article! [...]

  4. Stop Listening to Real Estate Agents! - April 5, 2011

    [...] Each day we attempt to give truthful insight on the current housing market. If we report what is perceived as negative news, some in the real estate community come down on us hard. However, when we explain that we think now is a great time to buy, we get an avalanche of feedback from the general public attacking us for being nothing more than puppets for real estate agents across the country. full story [...]

  5. Market Responses and Real Estate | Truth and Service [Larry Lawfer] - April 6, 2011

    [...] I am sharing an article that I first read on KCM Team yesterday.  The title of the full blog was OK, Stop listening to your real estate agent!  This is [...]

  6. * STOP LISTENING TO REAL ESTATE AGENTS! « Short Sale Chicago - April 7, 2011

    [...] Each day we attempt to give truthful insight on the current housing market. If we report what is perceived as negative news, some in the real estate community come down on us hard. However, when we explain that we think now is a great time to buy, we get an avalanche of feedback from the general public attacking us for being nothing more than puppets for real estate agents across the country. Today, we don’t want you to listen to what we think about the opportunities that exist for buyers in this market. Instead, we want to report on what some members of the investment community are saying. Read more… [...]

  7. OK. You Win. Stop Listening to Real Estate Agents! « Jody Grubbs' Real Estate News - April 7, 2011

    [...] OK. You Win. Stop Listening to Real Estate Agents!. [...]

  8. Real Estate Radio Philadelphia – April 10th, 2011 - April 11, 2011

    [...] QRM: Is the Pendulum Swinging Back Too Hard? OK. You Win. Stop Listening to Real Estate Agents! Where Have All the Foreclosures Gone? Real Estate and Financing Are PERSONAL 5 Real Estate and [...]

  9. Why the Wealthy Are Buying | South Florida Luxury Real Estate | Nancy Batchelor - April 13, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  10. Why the Wealthy Are Buying | South Florida Luxury Real Estate | Nancy Batchelor - April 13, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  11. Untitled | Rhonda Aflakian - April 13, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  12. TEAM EMPOWERMENT MORTGAGE CHATTER: April 13; News & Headlines; Why THe Wealthy Are Buying; CAR Social Media Program To Feature Roost Platform; Survey: Americans Still Optimistic About Housing « Zackry Cooper's Blog - April 13, 2011

    [...] Fortune Magazine  and The Wall Street Journal [...]

  13. Why The Wealthy Are Buying | My Kinda Town Realty - April 13, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  14. Why the Wealthy Are Buying - April 15, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  15. Why are the Wealthy Buying? Fortune & Wall Street Jounal links « Maha Najjar - April 15, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  16. Why the Wealthy Are Buying « Bill Baker's Weblog - April 18, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  17. Why the Wealthy Are Buying | MSC Resources - April 19, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  18. Stop Listening to Realtors - April 26, 2011

    [...] great article from the KCM blog on purchasing a home in today’s market conditions. Filed Under: Pending, [...]

  19. Why the Wealthy Are Buying - HomeTeam4u - April 27, 2011

    [...] Fortune Magazine and The Wall Street Journal [...]

  20. OK. You Win. Stop Listening to Real Estate Agents! - April 28, 2011

    [...] by THE KCM CREW on APRIL 5, 2011 · 3 COMMENTS [...]

  21. Stop Listening to Realtors - May 12, 2011

    [...] Listening to Realtors April 5, 2011 Leave a Comment TweetA great article from the KCM blog on purchasing a home in today’s market conditions. Related Posts:Buyers [...]

  22. SAN DIEGO, CA HOME SALES STATISTICS 9/11 BY Jane Foster, San Diego Ocean View Homes Realtor « Jane Foster San Diego Real Estate Blog - October 12, 2011

    [...] http://www.kcmblog.com/2011/04/05/ok-you-win-stop-listening-to-real-estate-agents/ [...]

  23. Stop Listening to Realtors — LiveInUtah.com Real Estate - March 3, 2012

    [...] great article from the KCM blog on purchasing a home in today’s market conditions. Related Posts:Buyers [...]

  24. Stop Listening to Realtors - January 16, 2013

    [...] great article from the KCM blog on purchasing a home in today’s market [...]

  25. Stop Listening to Realtors | Real Estate | The Wangsgard Review - April 27, 2014

    […] great article from the KCM blog on purchasing a home in today’s market […]

Leave a Reply