Residential market returns to normal - Notes from Jim Haughey - Blog on BuildingTeam Construction Forecast - 1410000141: "Residential market returns to normal"
“The seller is very motivated”. That’s how the agent greeted my wife and me at an open house last weekend at a beach house in Maine. What a contrast those words are with how we were greeted by open house agents last February when we toured canal houses in Cape Coral. Then, agents told us that we should sign a contract that day before the price was increased, although several agents said this with little conviction.
It is not just the real estate agents who have a new attitude about the housing market. Last winter a Florida builder told us he would need 15-18 months to build a partially customized version of one of his standard plans. Last week he called to tell us he could now finish a new house by October.
Mortgage brokers have a new attitude as well. In the past month the message in my daily dinner time quota of mortgage telemarketing calls changed completely. I am no longer being promised 1.5% mortgage rates but am now being told that I should convert my adjustable rate mortgage to a fixed rate before the rate adjusts higher.
Housing market suppliers have been through their period of denial and have now thrown in the towel. They have accepted that the current market environment, likely to last through next year, has few households left that can be badgered into buying a home for fear of rising prices or to lock in an unusually low monthly payment. They are now expecting a normal market.
Remember what a normal market is like? Contractors and brokers have to hustle to keep prospects away from competitors. Margins are much lower. And many of your colleagues in the housing market who came on board recently for the free ride in 2004-05 will soon be making another career change.
Normal is not that bad but it will take some getting used to.
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