Despite ‘Chicken Littles,’ Real Estate Markets Are Improving

Commentary by James Crumbaugh

RISMEDIA, April 8, 2009-April is now here and we’re all starting to hear positive news, almost daily, about the real estate industry. Don’t get me wrong - the “Chicken Littles” of the world are still out there, telling everyone who will listen that the sky is still falling.

Here at Allison James Estates and Homes, we go strictly by the numbers and the numbers aren’t lying. Our number of sales is up over 25% and our income was up in March over our best month ever by 31%. If the sky is falling, I sure hope it continues to fall at this rate every month.

However, the pundits are still claiming the bottom is still out there, but their case is leaking water. There are areas in the country that are already seeing small price increases, along with much stronger number of sales, and there are a lot of short sale realtors who still claim that the inventory is going to get much worse. If that’s so, I need an explanation as to why the inventory is decreasing in most areas. Sure, sellers are taking their properties off the market, but so what? Sellers have always taken their properties off the market unless they could get what they wanted. There is nothing new or revolutionary in this strategy.

The bottom line is there was an overreaction to the inflationary increases in real estate over the period between 2000 to 2006. As a result, real estate in most areas is now undervalued and the consumer has taken notice. One of the things I’ve noticed over the last month, is the number of end-use buyers is now as strong as the investors. This is a very good sign, as it shows that the pent up demand that we have all talked about for the past couple of years is starting to kick in.

On another note, the real estate brokerage business has been stood on its head due to the last three years. Everyone knew the old brick and mortar model was unsustainable with today’s realtors demanding and getting 80% plus. Then you have the 100% companies struggling because they made the mistake of trying to combine the brick and mortar concept with the 100% concept.

What surprises me is that Allison James Estates and Homes is still the only business model of its kind. We have eliminated the brick and mortar and allow our Realtors to work virtually from their home offices while keeping 100% of their commission. This is a simple business model, and I have nothing to hide with it.

It’s not rocket science, I’m just surprised no one has copied us. We all know that a lot of brokers are challenged in this area, and at Allison James Estates and Homes, we work as a team to keep our brokers at the top of the industry.

All in all, we are 14 months old, we are profitable, we’re having fun and we’re growing at a steady clip of 20% + per month. Chicken Littles take notice.

James A. Crumbaugh III is CEO of Allison James Estates & Homes.

For more information, email jcrumbaugh@AllisonJamesInc.com.