A Message from Lawrence F. Flick, IV, Chairman
and Chief Executive Officer
Prudential Fox & Roach, Realtors®
The Chairman’s Report
An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.
HERE’S A QUIZ...
TRUE OR FALSE:
1.Home prices have come down over 50%.
2.Over 6% of households are in foreclosure.
3.The suspension of foreclosures by major financial institutions
will delay recovery of the real estate market.
The answer for each is - IT DEPENDS.
In Las Vegas, Nevada prices have come down an average of
58%. In the Prudential Fox & Roach market area, prices have
declined an average of 7% from the peak of the market until
now—a very moderate number.
In addition to having the distinction of experiencing the
greatest price declines, Las Vegas also has the highest foreclosure
rate at 6.6%. Less than ½ of 1% of households in our market
area are in the foreclosure process—one of the lowest rates in
the country. Because foreclosures make up such a small
percentage of households in our market, if some were
suspended the impact would be insignificant.
As Prudential Fox & Roach sales associates, you understand that
real estate markets are local, that our prices haven’t taken a
nosedive, and that our market isn’t flooded with foreclosures. But
your clients may think differently. They have been inundated with
a continuous stream of negative news from the press because
extremes, whether booms or busts, get attention. Five years ago,
good news about the real estate market was exaggerated. Now the
statistics from the worst market in the country are generalized as if
they were occurring everywhere. That’s why it’s so important for
you to help your clients separate fact from fiction.
HERE’S ANOTHER QUIZ:
TRUE OR FALSE:
Now is the best home buying opportunity of a lifetime.
The answer for our marketplace is TRUE!
· We have clearly seen the bottom of the market. Unit sales
have dropped after the April 30, 2010 expiration of the
home buyer tax credit, but annual sales have been stable
for three years.
· Prices have been stable this past year.
· There is a great selection of homes and sellers have become
2. Interest Rates
· Interest rates are at generational lows. It is hard to believe
they will go much lower, and they will definitely rise as the
economy begins to improve. We would normally think of
5.5% as a terrific rate but at the current rate of 4.25% is
outstanding. A buyer borrowing $250,000 over 30 years
will save $2,700 each year over the life of the loan. That’s a
total savings of $68,000! You can be sure that The Trident
Group will follow through on the promises they make to
3. Quality of Life
· It’s not unusual to hear conversations about the rent versus
buy scenario. There are some advantages to renting but in
reality, the Philadelphia area has never been a rental
market. The best communities are made up of owners who
care about their properties. Owning a home is one of the
best ways to take control of our future.
· Houses are more affordable than they have been in years.
Stable prices and incredibly low interest rates allow buyers
to purchase more for their money so they can enjoy living
in a house that better meets their lifestyle needs.
4. Long-term Investment
· Owning a home has been the best long-term investment in
our area, far outperforming the stock market. In the past
ten years, the value of Philadelphia area housing rose an
average of 91%, while the S&P 500 lost 22.5%.
Right now, many people are carefully considering whether or
not to buy a home. Lack of confidence in the economy and the
job market are holding them back. But there is only so long to
wait before this opportunity ends. If life circumstances dictate a
move, it’s best to act now. I can’t imagine that conditions will
improve for potential home buyers in this area! In five or seven
years, many of your clients will look back and either be glad
that they bought a home or be sorry they didn’t. It’s up to you
to provide them with the expertise and knowledge to make the
right choice now, or else they will look back and say, “I should
have.” After all, the true value of what you do goes beyond
showing houses or writing contracts. It is in helping people
make their dreams come true.