Short Sales and Expireds are Realtor’s Safest Bets for 2014

01/08/2014 05:44 PM (CST)

real estateThere was a lot of optimism in the second half of 2013 surrounding the housing market recovery. However, the latest numbers don’t exactly support the long term recovery, at least not yet. So, what’s in store for the market and real estate professionals in 2014? RealtyProx recently asked marketer, real estate coach and former banker Lee Honish these questions during our first “Marketing Tuesdays” webinar this year. Below is a brief summary of our discussion.

Lee Honish predicts that somewhere in the first quarter the government is going to drop the value of money. Come next summer, and interest rates will be lowered (albeit very insignificantly) to stimulate summer sales.

“For a very short period the interest rate drop will help get rid of the property glut that’s on the market”, says Lee Honish.

It’s very likely that May, June and July of 2014 are going to be the hottest months in real estate. During the summer months Realtors have the best chances of getting all kinds of listings, including traditional equity sales.

Towards the end of the year, the government will probably stop the quantitative easing process and then we will have a flat final quarter once again. In many regards, 2014 is going to look a lot like 2013. It will start with a stale and flat market, followed by the government’s attempt to stimulate the market at the end of the first quarter; and then we’ll see the appreciation of 0 to 3 percent, which is, again, a flat market.

With market remaining generally flat, the safest bet for listing hungry real estate professionals will remain specialty listings, such as short sales and expireds. Armed with specific data and niche-specific tools (such as RealtyProx), real estate agents have better chances of scoring a specialty listing than impulsively following the ever-changing market.

The government and banks seem to be pushing short sales again. Initiatives that involve auctions forced out larger institutional investors and cash investors in general. This was done by design in order to freeze investors out of REOs and short sales and bring back the fair market value. This trend is likely to continue.

Lastly, one thing that’s unique about 2014, in Lee Honish’s opinion, is that 5/1 option balloon mortgages will start to come due this year. We’re talking about tens of thousands of files nationwide. Some of them will get modified, but other will hit the market. The rest of the shadow inventory will have to be defused, mostly by continuous use of and Nation Star.