Good news, bad news time for real estate and the general economy this week.
The bad is, I am afraid, very bad, indeed.
Prices for single-family homes took a nose dive in the first quarter of 2008…down an enormous 14.1 percent from the year before.
Standard & Poor’s/Case Shiller report, according to Reuters, says this is at “a pace five times faster than the last housing recession.”
The chairman of S&P’s index committee tells the wire service, “There are very few silver linings that one can see in the data.”
And now, says the New York Times, the housing mortgage mess has spilled over into the auto industry in a very big way. Mostly because many people can’t borrow against their mortgage now.
Shares of General Motors Tuesday slid to a 27 year low!
Okay, now some good news…for consumers but maybe not so good for bricks-and-mortar brokers.
The U.S. Justice Department has just reached a deal with the National Association of Realtors in an anti-trust case.
Says the New York Times on its website, “government officials said (the deal) should spur competition among brokers and ultimately bring down hefty sales commissions.”
Told you this may not be such good news for brokers…though it is for consumers and, in particular, for Internet real estate brokers.
Under the terms of this settlement–the case goes back to 2005–Internet brokers will be able to use the multiple listing services that are used by other brokers and which were sometimes denied them.
A judge still must approve all this, of course.
Here comes the good news, bad news thing again—one expert predicts this deal will eventually result in a reduction of sales commissions of as much as 50 percent! Good for consumers, bad for some brokers.
The Times quotes one business professor as saying, “It’s pretty clear that there was an enormous amount of discrimination against brokers who were trying to use innovative business models. There are lots of entrepreneurs who have been looking for a green light in the form of this order to begin offering discounted rates. It has the potential to be a big step forward for consumers.”
Could this be the spark needed to breathe new life into the real estate market? (yes, I know there are really several markets depending upon where you live, but, in general, the real estate market nationwide is not doing all that well!)
I doubt it. Too many other things need fixing, too.
Having said that, anything that means lower rates for home buyers is bound to, over time, help improve the dismal picture we now have, and that has to be good news no matter how you look at it!