We've been reading a lot lately about today's market, how different it is now from last year.
I thought it might be fun to look back a lot further - to the 70's, when I was first licensed in Maryland, and contrast it with today's high-tech world of real estate. (My real estate career actually began as an office manager at Parkman Realty in San Diego, California, 5 years earlier.) Since then, I've listed and sold homes for four decades - during war and peace, recession and inflation, buyers' markets and sellers' markets.
Some of you may not have been alive yet, and others were too young to be home buyers or sellers then, so perhaps you will find this interesting:
1. A brand new 3 bedroom, 2 bath brick-front townhome in Crofton Maryland was priced in the low $20's. Today, the same home sells for nearly $300,000; and new townhomes not far away have been known to sell for more than a half million dollars.
2. A real estate sales contract was 2 pages long on legal-size paper, with blanks filled in by hand. Today's real estate contracts in Maryland are commonly about 45 pages long, computer-generated on letter-size paper. The half-page listing contract has been replaced with a dozen or more pages, including the addenda.
3. The multiple listing service was alive and well, but home information could only be found on index cards, and later in a book published weekly. New listings usually did not have any photos; those came later - a black and white exterior photo appeared a week or two after a property went on the market.
4. Expensive print advertising was the only marketing choice (unless you want to count cold-calling and open houses). Who could have imagined blogging, social media, even television? Typewriter was the hi-tech option for creating property flyers, with glossy photos attached to black and white photocopies by glue or tape.
5. Real estate agents could show other company's listings, but they had to go to the other company's office to get the key. Then they had to return it before they could show another house, in case another agent needed that same key. Today's agents just aim their cell phones at an electronic key lockbox to obtain the key for a property.
6. Speaking of phones, when an agent was running late or got lost (no GPS systems in those days), he or she had to stop and find a pay phone to place a call. Today they can make a hands-free phone call from their car.
7. Telephone tag was the norm, with buyers and sellers having to leave a message with a receptionist and then wait for an agent to call them back with information about a property or anything else. Today, we not only have voice mail, we have text messaging and email; instant communication rules the day!
8. Real estate agents always represented the seller, even when they worked with the buyer... even if the buyer was a friend or relative. Today's buyers have their own exclusive representation from a buyer's agent who looks out for their best interests and has no fiduciary relationship with the seller.
9. The interest rate was about 7%... shot as high as 17% during the Carter Administration... and remained double-digits for most of my career. Who ever thought we'd see five or six percent in our lifetime? Yet we did, and the rate has hovered in the 6's for over a year.
10. Expensive print advertising was the only marketing choice. Who could have imagined blogging, social media, even television? Typewriter was the hi-tech option for creating property flyers, with glossy photos attached by glue or tape.
11. There were only three loan choices: VA, FHA and Conventional. All of them were 30-year fixed rate loans. If the buyer was not active duty military or a veteran, VA was not an option; the FHA loan limit was $33,000 so that was not an option for higher-priced properties; that left Conventional. Adjustable rate loans, buy-downs, wrap-around mortgages and other creative loans were the market's answer to high double-digit interest rates... yes, 17%. And they remained available when rates went down. Today, it seems we've gone full circle - back to those three basic loan choices.
12. Contracts were written "subject to loan approval"and the process did not begin until a ratified contract was in hand. Verifications for employment, funds, and outstanding debts were done by "snail mail" - aka known as the U.S. Post Office - so 60 days was a common time-frame for the financing contingency. Settlements were often 90 days after contract. By contrast, today's buyers generally get pre-approved for a loan - a process which can take as little as a few hours, and rarely more than 24 hours - and only then do they go look for a home. Since the only thing outstanding after contract ratification is usually the appraisal, settlement often occurs in today's market within 30 days.
13. Delivering a contract, counter-offer or addendum required hopping into the car and driving it to your destination... or a postage stamp. Fax machines have saved a lot of time and gasoline for real estate agents in recent years! Who could have imagined video phone calls, electronic signatures, email...
As you consider how different this market is, compared to last year and the year before, perhaps this little stroll down Memory Lane will brighten your day. Lower prices and larger inventories aren't really so bad...
If you want to buy or sell a home in this market, find yourself an experienced agent who has "seen it all" and is not intimidated by today's market - one who knows what steps are necessary to maximize YOUR profits in today's market because they've lived and worked through tough times in the past - and yet they've jumped on the technology bandwagon and know all the tricks necessary for helping you sell or buy a home today.
Copyright 2007. All rights reserved. Margaret Woda
Copyright 2010. All rights reserved.
For answers to your real estate questions about Bowie, Crofton, Davidsonville, Fort Meade, Gambrills, Odenton and other communities in Anne Arundel County, Maryland, contact Margaret Woda at Long & Foster Real Estate, Inc. or simply click on a button below for information you can review online at your own pace:
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