A housing market that has eroded homeowner equity and spurred a
rash of foreclosures is now putting the squeeze on people who help
make the American dream a reality
Morgan Hill – A housing market that has eroded homeowner equity and spurred a rash of foreclosures is now putting the squeeze on people who help make the American dream a reality.
Realtors, loan agents, mortgage brokers, property inspectors – all are feeling the pressure of an industry that has cooled after several years of frantic home sales.
Longtime Realtors with established reputations say they are hustling harder to make fewer sales, even as they continue shelling out thousands of dollars to stay in business. The pressures have forced some to leave the industry, while those that remain have had to adapt.
Susan Patereau, a member of the Gilroy Chamber of Commerce’s board of directors, left the real estate game after seven years. She said her husband Rick remained in the business, but the need for more regular income forced her to take a job as director of a regional biotechnology program at Gavilan Community College.
“We were still getting listings. We just weren’t getting enough of our listings sold so that we had enough regular income to support our household,” said Patereau, 56. “There are plenty of listings out there and we have some, but they’re just lingering too long. Instead of having two closings a month, it may take two months to get one sold.”
Patereau said she hopes to return to the business when the market picks up again. In the meantime, her husband and thousands of others continue to grind out a living.
“You have to work doubly hard to get it sold, even if you’re door knocking, marketing, calling people,” said Trish McRae, an agent with Intero Real estate who has home listings in Gilroy and Morgan Hill. “It has to be mint condition, model looking, to even get it sold in three or four months.”
The numbers bear out McRae’s experience. Median home prices in Morgan Hill dropped to $858,000 last month, compared to $1 million for the same month last year, according to figures from multiple listing service RE InfoLink and the Santa Clara County Association of Realtors.
Similar to its neighbor to the north, Gilroy has seen a dip in median values and an increase in the number of homes on the market. But the biggest change in both cities involves the length of time it takes to sell a home.
In July 2005, single homes in both cities sold in less than 30 days on average, according to the RE InfoLink figures. Last month, that average stood at 80 days in Gilroy and 62 in Morgan Hill.
Paying the bills in such a market has proven difficult, said McRae, whose monthly fees for yard signs, membership in industry groups and other standard costs run into the thousands of dollars.
Yet McRae said she has never considered giving up on the real estate business, a career she deferred until her children left home.
“I have thought, ‘Is there any way I can make a supplemental income during this time?'” she said. “I’ve thought of it. But I haven’t done it.”
That’s not the case for all local Realtors.
Membership in the Santa Clara County Association of Realtors has dropped from 8,669 to 8,390 in the last year. That slight drop of 279 members may not reflect the extent to which real estate agents have been forced to adapt to a changing market.
“We’ve seen some people who have gone to staging or moved into another career path, but many of them keep their licenses,” said Warren Winsness, president of the Realtors association. “Some are going back to Silicon Valley jobs and are doing real estate on a part-time basis.”
The market is far from stagnant, Winsness added, pointing out that established Realtors continue to sell homes quickly in cities such as Los Gatos and Saratoga.
“I just think people have to price their homes well and know what their market is,” Winsness said.
Business has slowed to half of what it used to be for Patty Filice, an agent with Intero Real Estate in Morgan Hill. Filice, who has 24 years experience in the industry, still sells enough homes to pay her bills and the salary of a full-time assistant. But she said the days of the easy sale are over.
“Everybody is selling less this year,” Filice said. “The advantage that long-term professionals have is that we’re not hit as hard as the newer people because we have a larger pool of contacts and past clients and referral base.”
But Filice agreed with McRae.
“We’re hustling a lot harder for the sales,” she said. “Price and condition are extremely important. If they’re buying a fixer-upper, they better be getting a great deal.”
Realtors aren’t the only ones hit hard by the down-tick in the housing industry, according to Marty Braverman, founder of MB Mortgage Inc. Braverman, who serves as the financial middleman between banks and buyers, said he has turned more to re-financing as a source income as fewer people seek mortgages for a new home.
After 40 years in the real estate business, Braverman said he has seen lean times before. But he said things are different nowadays. Though foreclosure faces many buyers who over-extended financially, Braverman said good deals abound.
“This cycle is more about perception than reality, but unfortunately that perception has become reality, I guess,” he said. “All the right factors are in the right place – interest rates historically are still good, there’s a strong inventory, we’ve got willing sellers and soft prices. It’s actually a fantastic buying opportunity, but unfortunately people are buying into the doom and gloom.”
