Dan Hernandez, the newly installed president of the Ada County Association of Realtors, says you have to earn the right to be a successful residential real estate agent. As a young man back in Los Angeles, Hernandez routinely stayed after hours making up to 50 cold calls a night. He also went door-to-door introducing himself to people, most of whom had no use for his services. There was time spent working the "For Sale By Owner" and expired listings markets, as well as various Internet lead generation systems. The hard work, and the law of averages, has paid off in a career dating back 14 years. Hernandez now heads an organization of some 4,000 Ada County Realtors who are struggling to weather the worst sales downturn in recent memory.
Q: Has the art of selling residential real estate changed?
A: The basic fundamentals have not changed, As I told you, I cold called, knocked on doors and worked the lead box. In my view, many agents came into the business for quick buck. And they have not paid their dues of developing relationships or databases that an experienced agent has. That, in my view, has a lot to do with why they have failed. They were not willing to put in the work needed to be successful. Today, the basic fundamentals have not changed. You need to go out there and meet the people. You need to put yourself in a position where you are handing out your card and saying, "Are you interested in buying a home or selling one in the near future?" Too many agents don't succeed because they sit down and wait for the phone to ring. It requires much more than that. Buyers and sellers are a lot more sophisticated than they have been. They're looking for a qualified professionals.
Q: In your 14 years, have you ever seen a market as bad as this one?
A: This is nothing. I was in Los Angeles when the market crashed in the beginning of 1990. The market almost died overnight and seemed to hit rock bottom. So this is nothing. We're in a very strong, healthy market. I'm still representing buyers that are buying homes, and I'm still selling homes.
Q: Are there any signs that we've bottomed out and are turning upward?
A: I can tell you from my personal experience as a Realtor out there on the streets that, in the last three or four weeks, I have seen more activity than I have seen in several months. Homes that had been languishing for a period of time now have multiple offers. I have spoken to other agents and asked, "Is it just me?" Their response has been no, that they have seen the uptick, too.
Q: What do you say to people who say the Treasure Valley has not seen the worst when it comes to the mortgage crisis?
A: My understanding about the subprime crisis is that more homes with those types of (adjustable) loans will reset in '08 than in '07. So I believe more homes will go into default this year than we had last year. Having said that, the January (sales) numbers showed that the median price for resale (existing homes) continued to increase, jumping almost 4 percent from January to January.
Q: But how can we be in a downturn and still see increases in median prices?
A: The January numbers showed that in Ada County sales were down 33 percent from the previous January. So people are being much more cautious. But once they get something, it holds its value. If you look at as a multiyear investment, you're going to come out ahead.
Q: But there are lot of things putting downward pressure on home prices nationwide. Whyhasn't it happened here?
A: Because Boise continues to be one of the most desirable places to live in the nation. I deal with quite a few out-of-state buyers. I'm going to have to use the C word here, but the majority are still coming in from California. The number of Californians who have been able to sell their homes has dropped off because that market is flat. But those that are successful in selling want out and are still moving here. Boise is their location of choice.
Q: Again, what about those median prices?
A: If you look at other areas, they mention having home appreciation of 35 percent or even 50 percent. We didn't have that. We went up 20 percent. But averaged over five years, we're a solid 10 percent a year. People here ask me when is the housing bubble is going to burst. My response is that there is no bubble because what we've had was steady growth that has been relatively conservative compared to what we have seen elsewhere. When appreciation rates shoot straight up, they're bound to come back down. And that's what's happening elsewhere.
Q: Was having so many outside investors here bad for the market?
A: I can't say yes and I can't say no. But I look back at the level of investors we had, and it was bad for the community. I saw many transactions where the buyers were investors who wrote and offer on new construction with the expectation that by the time the transaction closed there would already be some equity there. And when it did not reach the level that they anticipated, I saw investors bail, giving up there ernest money just to get out.
Q: Will we see investors returning to the Treasure Valley?
A: I think Californians are "flirting" with the Idaho housing market.
Q: We're seeing a lot of foreclosures locally. Won't dumping that many homes on the market depress home values even more?
A: Again, I'm looking at my own experience as a Realtor out there on the street, and not as president of the association. And as I mentioned before, I'm still selling homes - even with the high numbers of homes out there that are in default. I know many agents are working the default market and are doing quite well. Even with the number of defaults, I have not seen any change in the level of activity.
Q: How many agents has the association lost during this downturn?
A: Strangely enough, we're not seeing a lot. We budgeted for an 8 percent loss overall. But based on dues collection, it has been less than half of what we expected.
No comments:
Post a Comment