|New-home Sales Fill the Gap||| Print ||
|Thursday, 25 October 2012 14:37|
By Carl Medford, CRS
Special to the Times
Browsing real estate headlines last week, I was puzzled to see one opposing the rest. While most touted a rising seller’s market, one stated: “Existing Home Sales DOWN in September.”
Down? With buyers clamoring to see every new listing and multiple offers everywhere, how could that be?
Simple, I discovered. For the past few months, this column has stated that there’s not enough inventory to satisfy current buyer demand. Foreclosures are diminishing and many homeowners are choosing to hold rather than sell. Ipso facto: less inventory.
Bottom line? Sales are down because there are fewer homes to buy. Many buyers, frustrated by repeatedly losing to investors with cash, are actively seeking other options. Their crosshairs are starting to focus on… new homes.
A year ago, new homes were at the top of the market’s price range and perceived as out of the reach of many buyers. However, increasing re-sale property prices are leveling the playing field.
In fact, many new-home builders are now raising prices as current inventory is not only selling out, but pre-sales are increasing as well. Some are purchasing new homes they’ll not be occupying until next summer.
While welcome news for builders and one more sign the market is headed towards recovery, it’s a headache for Realtors. Imagine an agent working with a buyer for months — driving them house-to-house, writing numerous offers, holding their hand while working hard to find their client new digs.
Picture that same buyer driving by a new development and, with questions percolating, entering the showroom. Therein lays a dilemma: If they enter without their agent, that very Realtor who’s worked so hard for months to support their buyer is suddenly… persona non grata.
It’s a game builders have played with Realtors for years: They want help, but, if they can sell units without paying Realtor’s commissions, they’ll quickly freeze agents out.
Some buyers, mistakenly thinking they’ll score a better deal without their Realtor, deliberately show up alone. Others simply don’t understand the rules. Whatever the reason, if buyers ink a deal without their Realtor, that agent not only loses their client, they get no financial recompense for their months of labor.
It’s a classic case of getting kicked to the curb and, while agents might be glad the buyers finally have a home, they also feel… like they’ve just been kicked in the stomach.
Carl Medford is a licensed Realtor with Prudential California Realty in Castro Valley. This article is sponsored by the Central County Marketing Association at www.ccmgtoday.com.