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Old 04-20-2008, 08:58 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,799,292 times
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An interesting sort of argument has arisen over on Rain City guide (A Seattle real estate blog I read) in the "Seattle real Estate - 2008 entry". In the Sunday night stats, "predictions" by a real estate agent were posted on what direction she felt the market was tending toward in sales/pricing. She felt they both would decline.

But that wasn't the part I'm really interested in talking about. Another poster on the forum is adamant in stating that predictions are "meaningless" and could either go up or down. Basically the question he asks - again and again - is "Would you buy a home based upon the predictions of a Realtor?"

Now it is an interesting question. And he has some interesting arguments to back it up.

As I mentioned in their blog:

The answer to your question would depend on whether that particular real estate agent offered sound advice or was spewing rhetoric. You have to do your own research as well. To do otherwise would be the equivalent of financial idiocy. You could rewrite this to say “Would you invest $500,000 in real estate based on the opinion of 1 person?” The answer, of course, is “Are you high?”

His response : But how can you tell the difference? Is the difference between sound advice and rhetoric simply whether it matches your own research? And if so, what’s the point of even getting the advice?

Now, that is an very interesting argument.

If you've already determined the direction of the market yourself...would the advice of an agent sway you? Or vice versa - would an agent's assurances cause you to buy in a market in which you did not believe in?

I'm still thinking about it.

What do YOU think about it?
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Old 04-20-2008, 09:08 PM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,672,056 times
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It is an interesting argument and ME personally, I have determined the direction of the market based on my opinion of supply/demand/psychology etc...

I'd have a very hard time being swayed by a realtor.

Now, not everyone selling thinks that way. Some have no clue what's going on or think their POS taj majal is worth much more than what the market will bear.
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Old 04-21-2008, 05:45 AM
 
Location: Melbourne, FL
1,007 posts, read 5,653,878 times
Reputation: 639
I think having a crystal ball would help. Wouldn't we all be rich?
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Old 04-21-2008, 06:05 AM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,672,056 times
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Quote:
Originally Posted by Janecj View Post
I think having a crystal ball would help. Wouldn't we all be rich?
Janecj, my point is it didn't take a rocket scientist to figure housing would start and continue to decline 1-2 years ago because of the record amounts of inventory, potential resets of ARM's and tightening credit standards.

Anyone who didn't see this either had their head in the sand, or just plainly doesn't understand supply and demand, its that simple.
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Old 04-21-2008, 07:32 AM
 
Location: Martinsville, NJ
6,175 posts, read 12,909,553 times
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Quote:
Originally Posted by CouponJack View Post
Janecj, my point is it didn't take a rocket scientist to figure housing would start and continue to decline 1-2 years ago because of the record amounts of inventory, potential resets of ARM's and tightening credit standards.

Anyone who didn't see this either had their head in the sand, or just plainly doesn't understand supply and demand, its that simple.
But one to two years ago there was not record inventory, and the credit market was humming along with no threat of tightening, banks begging to give money away to anyone who would take it. So, are people looking back now & saying it was easy to predict, using that oh so infamous 20/20 hindsight? If you know someone who was making that prediction 2 years ago, and was using some compelling evidence to back it up, please share with us. Sure, I saw people a year ago and two years ago, saying that the housing bubble was going to burst. But many of these people had been saying it every year since '95, and didn't actually "predict" anything. They were simply contrarians who, in a a cyclical market, were bound to be right eventually.
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Old 04-21-2008, 08:21 AM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,672,056 times
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Quote:
Originally Posted by Bill Keegan View Post
But one to two years ago there was not record inventory, and the credit market was humming along with no threat of tightening, banks begging to give money away to anyone who would take it. So, are people looking back now & saying it was easy to predict, using that oh so infamous 20/20 hindsight? If you know someone who was making that prediction 2 years ago, and was using some compelling evidence to back it up, please share with us. Sure, I saw people a year ago and two years ago, saying that the housing bubble was going to burst. But many of these people had been saying it every year since '95, and didn't actually "predict" anything. They were simply contrarians who, in a a cyclical market, were bound to be right eventually.
Inventory was building at record levels and prices were extremely out of whack.

Look at NJ. Things started to go downhill at the end of '05, but you had the NAR ignore this data and say things will "level off".

Remember at the end of '06, many realtors thought we would just have a little pain but nothing major?

Bill, look at my posts when I started here last August. I've been beating the same constant drum forever, arguing w/the same people.... Home prices are getting back to historicals but there still will be pain for awhile....

Again, if you weren't beating the drum or didn't see it coming then you weren't paying attention.
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Old 04-21-2008, 08:38 AM
 
Location: Salem, OR
15,528 posts, read 40,281,166 times
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I actually know the blogger you are talking about and she is a great real estate agent. I do think buyers and sellers hire us to stay on top of trends and look at data.

I would say about 20% of the buyers and sellers I work with are like CJ in that they really do a lot of reading and looking prior to working with me. They are well informed. Most buyers and sellers do rely on real estate agents for that information. I think that is kind of the point of having one. I don't read up on the details of law, or the latest tax laws, if I hire an attorney or CPA. I hire someone I trust to stay on top of things for me.

I do agree with the blogger that people tend to hire people who will agree with their viewpoint. Our decline here in Salem started much later than the rest of the country. As I was seeing things really slow down, I had several listings that I "lost" to other agents who said the opposite. Those homes are still on the market or expired now. I know some people can't tell the difference.
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Old 04-21-2008, 09:49 AM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,672,056 times
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Quote:
Originally Posted by Silverfall View Post
I actually know the blogger you are talking about and she is a great real estate agent. I do think buyers and sellers hire us to stay on top of trends and look at data.

I would say about 20% of the buyers and sellers I work with are like CJ in that they really do a lot of reading and looking prior to working with me. They are well informed. Most buyers and sellers do rely on real estate agents for that information. I think that is kind of the point of having one. I don't read up on the details of law, or the latest tax laws, if I hire an attorney or CPA. I hire someone I trust to stay on top of things for me.

I do agree with the blogger that people tend to hire people who will agree with their viewpoint. Our decline here in Salem started much later than the rest of the country. As I was seeing things really slow down, I had several listings that I "lost" to other agents who said the opposite. Those homes are still on the market or expired now. I know some people can't tell the difference.
Great post.

Also, let me be clear, I don't have anything "against" realtors in general. The realtor who sold my house was awesome. She and I were on the same wavelength the ENTIRE process.....

Also, as w/most service industries, you take alot of undeserved grief from people....

I just think their leadership (NAR) is awful and gives the industry a black eye.

Just my .02....
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Old 04-21-2008, 12:22 PM
 
Location: Chaos Central
1,122 posts, read 4,100,331 times
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Quote:
Originally Posted by 70Ford View Post
If you've already determined the direction of the market yourself...would the advice of an agent sway you? Or vice versa - would an agent's assurances cause you to buy in a market in which you did not believe in?
For me, the short answer is "no".
I read and listen to all the information and advice possible, but at the end of the day, it's my money, my risk. I'd rather take the responsibility for making my own decisions, good or bad, than let myself be persuaded into something I might bitterly regret for a very long time.

Unless of course, the advisor would be willing to guarantee their advice with a money-back policy
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Old 04-21-2008, 01:02 PM
 
Location: Big Island of Hawaii
1,375 posts, read 6,291,309 times
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My first broker was a pretty straightforward, down-to-earth kind of guy. During training, he made it clear that when a client asks for a "prediction" that an agent should respond thoughtfully, but clearly--his statment was that agents aren't licensed to predict markets. Agents are able to share historical data and are in a position to constantly watch and evaluate current activity. Based on that, as well as observing data from other sources about our economy (local/national/world), well-informed real estate choices can be made, but none of us can truly "predict" a market.

I live near an active volcano and in a place where tsunamis occur every few decades. There are expectations for our market, given no natural disasters, etc, etc, but no one can truly "predict" what will happen in our market. The list "what-ifs" that are potentially unknown is endless.

For clients who are well-educated about their markets (not everyone is or has the time to become an expert), they should certainly use their own judgment as well as work with a smart, alert Realtor who has the tools to keep them informed about what is currently happening.
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