Wow. I'm not sure really where to begin. But there is so much mis-information out there I thought I would write this email and give you my views. Since we've had a relationship in the past, or even present, I thought you may weigh carefully what my analysis is of where we currently stand.
Yes. I'm Still In Business
In the past month I've received two calls asking me if I was still a real estate agent. My answer is "Absolutely." I have worked too hard and built too much of a business to quit...barring a 1930's depression. :) In fact, 2008 wasn't that bad a year for me. For the first time in my seven years of real estate I actually made slightly less than the year before. But it was only 1.3% less. So I'll live. 2009 looks like it will be about like 2008. So I can handle that.
Some of you also know I've also opened a portrait studio with my wife. The studio has replaced her job and a great many times you can find me there as well, tucked in the back working on both photography and real estate. I started shooting professionally in 1992 and found I could never work it out of my system. For some of you that may be a turn-off that I do two things. But hopefully for most of you there is the realization that I do the both really well.
Is The Real Estate Market Going To Hell In A Hand Basket?
That depends on where you live and where the properties you own are located. The answer is far longer than any CNN or Channel 9 news story can tell you in two minutes worth of sound bites. Here is a quick run down of my thoughts;
Nationally - it's not pretty. I know dozens and dozens of real estate agents that have had to leave the business. California, Arizona, Ohio, Las Vegas and Florida are the hardest hit. The Northeast isn't doing so well, either. (And guess where the big media outlets are.)
Kansas - Wyandotte County has been hit hard. It's super slow there regardless of where you are in the county. But the further east you go the worse it gets. Johnson County has weathered this storm quite nicely. The area from 63rd St to I -435, State Line Rd to I - 35 has done better than could be imagined. To be sure there are foreclosures there, too. But overall I can still point to neighborhoods where houses sell in 60 days or less for 97% of asking price.
Missouri - Brookside is doing pretty darned good. Some softness. Waldo is softer than it was but that allows for some fabulous buys. There are three potential rent homes I'm drooling over right now, in fact. Lee's Summit has inventories that are higher than usual but I've seen some pretty good houses over there at good prices...but not give-away. Blue Springs seems to have slowed considerably.
Location, Location, Location - as is always the case the closer you are to employment and entertainment the better off your real estate has done. If you are looking to pick up bargains in Leawood and Brush Creek/The Plaza you won't find what the news is showing. Conversely, the farther away you go the more softening you see. Places I've recommended before like Blue Springs and Raymore/Belton have softened to the point where you should only buy investment property if you have some cash to hold on. If you do have that cash, I say go for it as those areas will bounce right back when times turn around...whenever that may be.
Personal Residences - again, depending on where you are I don't think you have too much to worry about. You can actually sell your house at or a little below market and move-up to make-up or exceed the difference. I can do the math for you if you like. You'd be amazed.
Investment Property - if you have followed advice you should have rents that are covering expenses. Now is not the time to sell these investment vehicles. I say hold. If you have cash (and job security...whatever that is today) you should definitely be looking to buy. Investment loans are much harder to come by today than they were a year ago. Don't even call unless you can invest a minimum of 10%. 20%-25% may be the minimum depending on your other situations.
Outlook - I'm predicting more of the same here in Kansas City. I really don't expect anything more than a soft bounce for Spring. Not quite sure how long that will last. With interest rates this morning at 5.125% I can only imagine that will help with the Spring sales. If your situation warrants, you may wish to consider refinancing your primary home. But don't expect a return to the glory days of the real estate market in 2009. From what I'm reading it may be 2011-12 before we start to see a turn-around of some sort.
Is This Depressing News?
To me, it is what it is. I love a challenge. It allows us to figure out how to do things better. That's what the banks need to do because they are screwing up their REO inventories with mismanagement and poor decisions. Everyone of us knows someone who is losing or has lost their job. Maybe their house is next. But we can all make it through. Of that I've no doubt.
Real estate wise my main concession is that I'm working with more primary home buyers and sellers than ever before. Investment property financing has gotten so cumbersome that it has ruled out a great many of otherwise qualified candidates. Throwing the baby out with the bathwater, as it were. Just this month I've had two referrals from some of you that have allowed me to help people buy their first home. And I thank you! Keep those coming. If you know of anyone that could use my professional real estate services, do not hesitate to contact me.
Whenever you have questions of any kind, don't be afraid to pick up the phone. Sorry this email has been so long. But I thought You'd like to know what this real estate agent thinks.
Chris Lengquist
Keller Williams Realty
Diamond Partners, Inc
Olathe, KS
913.568.1579
listwithchris (at) kw.com
