Home-buying traditionally takes off in April, but soft prices and a market glut could make this year different. We asked Tom Kunz, CEO of Century 21, for his outlook.
Question: What’s your biggest worry about the real estate market?
Answer: The business is a tough business no matter the marketplace. We try to focus our agents on dealing with sellers, who have just come off a time when they could get 10 percent to 15 percent price increases. [In the current market] there are no, or certainly fewer, investors. There are definitely not flippers in the market. People who are buying want homes for shelter. We have to go back to the fundamentals of providing service.
Q: Which markets do you expect to be the strongest this spring?
A: One area that may surprise you is that we are starting to see some strength in the New England area. It’s nothing I’m going to jump up and down about and raise the flag, but we are starting to see movement in the marketplace. The Carolinas are very strong and down around Atlantic City. The Midwest, you’re not going to see blazing increases we saw in the last few years, but it’s steady. Texas is strong. Some cities in Idaho. It’s a spattering across the country.
Q: The weakest?
A: Florida is still in a weak position. California had a pretty good decline, but I was out there the weekend before last and went to some open houses, and there were a lot of people in those open houses. … Las Vegas is still a bit of a weak market.
Q: What kinds of incentives are people using now?
A: Sellers are helping buyers “buy down” the interest rate (on their mortgage loans). That seems to be a pretty good one. Home builders have increased incentives … (but) for the most part, a property has to sell itself. You can come up with incentives, but at the end of the day, it’s got to appeal to whoever is walking into that home.
Q: Would you sell your home in New Jersey in today’s market?
A: Sure. There are some homes in my complex for sale right now. I think there’s this perception that people wait for a good market to sell their homes. Most people buy or sell because of major events taking place in their lives: births, deaths, marriage, divorce. No matter what the local real estate market is doing, having a job change as I did three years ago, going from California to New Jersey, I had to buy a house and sell a house. I may not get as much for the house as a year ago, but when I have to buy something else, it’s not going to cost as much as a year ago. It’s a good move-up market.