Agent Beat™ is a new feature wherein we interview some of most successful real estate agents in the Twin Cities for insights and expertise that you can use to better understand the market, get to know some of the best agents in town (sometimes half the battle,) and generally be a smarter buyer or seller.
Vital Stats for Zeb Haney:
1st year in the business: 2006
Homes Sold 2010: 35
Most expensive sale ever: $1.4 M
Least Expensive: $107,000
7 Quick Questions Interview:
Q. First off, you mention that you are an avid reader. What’s under your nose right now?
A. 2 books: James Michener’s ‘Texas’ and also Barry Eisler’s ‘Inside Out.’
Q. Moving on to real estate – your core market seems to be the lakes area of Southwest Minneapolis. Are you you seeing any trends there that might break with popular conception?
A. Not so much popular conception – this area has taken it’s lumps like many others – but it has held up generally better than average. I am seeing price stability in the $300-475k price range, activity between $500-850K is picking up, but not quite where we’d like to see it, and above $900K we struggle with high inventory. Upper-bracket properties are tough to move, and we’re seeing continuing devaluation at this price-point.
One interesting note: Our market suffers a little from a lack of quality listings. There’s a large supply of mediocre, over-priced inventory, but quality homes priced in line with the market are moving very, very quickly, often in multiple offers, sometimes selling in a matter of hours. I sold a home at 53rd and Humboldt Avenue South, Minneapolis in 22 hours, with multiple offers, one of them being cash. The asking price was $459,900. This is a perfect example, it was one of the rare, half-dozen, excellent homes we’re seeing per year, that was priced-right, immediately out of the starting gate.
Q. What one piece of indispensable advice would you give to buyers right now?
A. Be Ready. As I mentioned above – despite all the press about a buyers market, the good properties move very, very fast. I’ve found that 1 out of 3 buyers are not prepared to move as quickly as this market demands, and they miss opportunities. Have your financing and pre-approval letter in order. Realize you may not have a week, and in many cases even the weekend to “think about it” when the buyers you are competing with will not grant you that luxury. Be ready to be decisive, and have a firm idea of what will work for you.
Q. We are something like 5 years into the real estate downturn. What data will convince you the market is truly healthy again?
Once I see foreclosure re-sales under 15% of the market as a whole, and inventory hovering in the 5-6 months range, then I will call it normal. At that point, the tremendous distortions of foreclosures and over-supply will have abated – we’ll have a natural market with predominately traditional buyers and sellers. That’s my first definition of trending toward a healthy market.
I’d also note that healthy does not necessarily mean “best opportunity” – some of the best opportunities are out there right now.
Q. A question that has almost been reduced to sport or farce is “When will the market recover?” Care to jump on that grenade?
A. Depends on how you define recover, but I think we are looking at another 4-5 years for this to wash out and get back to healthy, as I described it above.
I’ve discussed this with some economists and some very good, older agents. Normally a housing boom goes about 4 years, and then another 4 years of simmering or correction. Essentially, we had an 11-year, housing boom.
The general consensus is (without having a crystal ball): a 4-5 year turn-around for lower and mid-brackets, and at least a 7 year turn-around for upper bracket ($900K+).
Q. What do you make of all this “Shadow” inventory talk - anything to it?
A. In the areas I do most of my business, I see it as a non-factor. Prices have come down because they simply got too high, and were disconnected from the fundamentals. Relative to other areas, foreclsoures and delinquency have been a much smaller problem. In the twin-cities market in general though, I’m still concerned about the 2nd and 3rd tier suburbs. I do see this talk to have quite a bit of legitimacy to it.
Q. Last Question: Where do you see interest rates fitting into this picture? Have lower rates helped? Do you worry about rising rates hurting the market?
A. It is easy to overestimate the impact of interest rates on prices and demand for housing – any effect is usually around the margins, because when people buy or sell homes, they tend to do so for personal reasons, and take market interest rates at the time as a given.
That said, if interest rates were to spike, we say see the exception that proves the rule – the recovery is still fairly fragile, and everyone has become accustomed to exteremely low rates, so the psychological impact of a spike in rates could really put a dagger in demand, at least for a short period of time. I think we’ll see rates rise into the 6′s by mid 2012, but hold in the high 4′s and 5′s for the next year or so.
Are you a buyer or seller and want to get in touch with Zeb? His website is right here: www.zebhaney.com. Check it out, and be sure to tell him you saw his interview on Behind The Mortgage.