Archive for February, 2010

Six Reasons Why the Housing Market Peaks Can Not Return

February 26th, 2010

John Mulkey, Author and Owner of, wrote this blog post recently about the direction the housing market is heading. John is a fair and balanced industry expert and he’s spot on with his perception of the market. John, having been a home builder, flipper and all-things-real estate expert for more than 40 years, understands that we all need a dose of reality: as much as we want to see recovery, there are some major and fundamental issues that will take a long time to work through. This is good news for Showhomes and a great reason to open a home staging franchise given the ongoingdemand for staging services. John is a home staging fan and believes now more than ever high quality home staging is needed to sell off vacant homes. Take a look at his post and let us know what you think:

Six Reasons Why the Housing Market Peaks Can Not Return

Down Housing MarketRecent conflicting reports about the housing market and whether or not it is truly in recovery have left consumers as well as those in the real estate business more than a bit confused; those whose business plan is dependent upon a full or quick recovery should proceed with caution. I believe the housing market is far from recovered, and, in fact, will not return to the levels of the past decade for many years—if ever. I see six reasons why the housing market peaks can not return, that it will never regain its past “glory days.”

● Robust home sales are dependent upon consumer confidence in the economy. Consumers must feel that both their personal economy as well as that of the nation is on sound footing before committing to such a major, long-term purchase, especially on the heels of the longest recession in more than half a century. Thus far, consumers are far from confident.

● A vigorous recovery of the housing market cannot occur as long as we have unusually high unemployment. While there is much disagreement on when and how our recovery will occur, the financial experts all agree that unemployment will remain at higher than normal levels for several years, and some projections do not indicate a recovery to “full” employment for as much as ten years. With at least 20 million unemployed or underemployed, and with awareness that many of the jobs lost will never return, a high rate of joblessness could possibly become the norm.

● The dramatic loss of home equity will significantly limit the pool of available move-up buyers. In the past, move-up buyers used the equity from their former home to help them purchase a larger/more expensive one; however, declining home values with the associated loss of trillions in equity means fewer sellers will have the resources to purchase another home.

● A continued high rate of foreclosures will depress both the housing market and the hopes of many potential buyers. The millions who have experienced foreclosure will be automatically ousted from the buying pool. For some, several years of damage to their credit rating will be the defining factor; and others will become permanent renters, avoiding the potential for further pain and the trauma associated with foreclosure.

● A slow increase in mortgage rates will reduce the number of qualified buyers. As we experience the higher mortgage payments associated with rising interest rates, many will fail to qualify for loans on the homes of their choice. Others, having been “spoiled” by the low rates of the past decade, will stay out of the market hoping for a return to those rates.

● Tighter lending restrictions will also result in fewer buyers qualifying for home loans. And the restrictions, combined with the declines in credit scores experienced by millions of consumers will only further reduce the number of buyers.

Additionally, there are other factors such as: high levels of consumer debt, changing demographics, and a diminishing of the appeal of home ownership as a result of experiences during the current recession, will only serve to dramatically alter the housing market for the foreseeable future. While there will always be a group committed to home ownership and will always be homes available for them to purchase, an expectation that the housing market will soon recoup its losses and regain its momentum, for me, seems extremely unlikely.

The Housing Guru: The one source for all your housing questions

Thomas Scott, Showhomes

Subscribe to this blog and get our posts in your email inbox

Showhomes Success in Orange County

February 23rd, 2010

Beth George, franchise owner of Showhomes Orange County and LA and who traveled with me to the Real Estate Staging Association national meeting in Las Vegas, emailed me these photos of a $3.9 million home she staged and helped sell recently in Orange County, CA:

She did an excellent job and  kudos to the live in Home Manager who brought this furniture with them when they relocated from Phoenix for a new executive job in LA. Beth was more than happy to find an empty vacant home that matched their furniture and we’re pleased it helped the home sell. Everyone wins!

We keep seeing homes like this one sell when nothing else does. Whole house staging with live in caretakers like this one are moving because they are the homes that buyers remember. Although they are expertly staged, they don’t look like it and buyers get really hooked emotionally.

Thomas Scott


We’re recruiting:

Showhomes Ranked in Top 10 for Franchisee Satisfaction

February 22nd, 2010

Nashville Based Showhomes Bucks National Trend and Scores Higher

2009 was a bleak year for business.

Franchised businesses, which typically outperform independent small businesses, were not immune to the downward pressure. The Franchise Business Review, which surveys individual franchise owners in franchise systems all over the country, reported that overall satisfaction scores dropped from the previous year.

One company, Nashville based home staging franchisor Showhomes, bucked the downward trend and posted sizable gains in the 2010 report. The company moved up from the #13 to the #6 spot in the exclusive Franchise Top 50 ranking and ranked #3 in the real estate franchise category. Showhomes placed behind real estate category leader Sotheby’s and ahead of Coldwell Banker for the second year in a row.

Kyle Stites, FBR marketing manager, said many of the 500 franchises surveyed are struggling in the down economy. “This is an outstanding showing for Showhomes,” Stites said. “They’ve earned some bragging rights.”
Showhomes is positioned to do well, if the company continues to respond to franchisees and embrace changes that affect their industry, Stites said. Of the 500 franchise companies surveyed, only 133 made FBR’s list of winners and only a handful placed as high as Showhomes.
Stites sees a pattern among franchises on the rise. “The best franchises communicate well,” she said. “They beat the competition by reaching out to franchisees, and by continually striving to get better through innovation. They are honest with themselves and embrace anything they can to continue to get better.”

Franchise Business Review, a New Hampshire-based franchise market research firm, is the only organization that publishes a rankings based on overall satisfaction of franchise owners.

“We’re extremely proud of Showhomes rankings, especially since Franchise Business Review has such a strong emphasis on the franchisee,” said Bert Lyles, CEO of Showhomes. “We believe owner satisfaction is critical to the success of Showhomes. We listen to our franchisees: if something needs to be improved, the franchisee will tell you. Our job is to listen. If they rank us highly, then we must be doing something right.”