Mothballing Open Houses?

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There was a time, ten or fifteen years ago, when I was convinced that traditional open houses were a thing of the past. Turnouts were diminishing. Visitors were a motley collection of looky-loos, nosy neighbors and tire-kickers drawn like moths to the corner signs and a chance to peek behind the scenes of someone else’s home and life.

I was almost ready to mothball my open house signs, ditch the cookies and hold the presses on all those glossy flyers I was printing at the expense of all those trees. At best, open houses seemed more like tools for younger agents to meet occasional living, breathing buyers. At worst, they were a way to pitch future listing services to all those nosy neighbors. None of it was really about selling the actual houses.

But I take it all back now. The advent of the low inventory market has changed everything. Open houses are once again a crucial part of the home selling process. Anyone who doesn’t do them hurts their chances to get the best results.

Here’s my thinking:

Every new listing is digitized and instantly downloaded to the market. The right audience is already out there waiting for the details.

Most buyers come from outside the county. Traditional move-up buyers who fueled past markets are missing from today’s equation.

Given daily traffic congestion, buyers from elsewhere don’t drive to Santa Cruz during the week to look at house – they can’t.

Most buyers reserve weekends to see new listings. They prefer to schedule their own time, drive their own cars and see things at their own pace.

In a multiple-offer marketplace, the goal for sellers is: generate the most showings in the shortest period of time after their house goes on the market.

Open houses act as effective funnels to collect, concentrate and clarify market interest incredibly quickly, usually the first weekend after a listing goes on.

For sellers, there’s nothing better than having swarms of buyers all eyeballing each other at the same time, trying to size up all the competition. That’s what motivates buyers to write offers quickly and competitively.

Time Horizons

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Buyers, have you noticed how much juicy inventory has been piling up? Suddenly there are more homes for sale than there have been for a long time. And it doesn’t look like most of them are going to be jumping off the market anytime soon.

There’ll be lots more choices going forward. You won’t have to have commit your life savings to a place you’ve only seen for a few minutes. And you won’t find yourselves locked in multiple-offer combat vying with ten other buyers for the same place. And you won’t have to feel so galled by greedy Sellers playing puppet-master with your emotions.

The tide is turning. Power is shifting away from an abject sellers’ market to a much more balanced one. Where confident Buyers have more say and a modicum of sway in how fu- ture transactions go down. So here’s the million dollar question: why aren’t you more excited? After six years of looking for some kind of leverage over sellers, isn’t this the kind of real estate you wanted?

More inventory? Softer prices? More negotiating room? What’s not to like? Why is the big worry suddenly: “What if I buy a house today and it’s worth less six months from now?” When did short-term doubt become a such a viable substitute for long-term decision making?

Let’s take a quick trip down memory lane and look for some insight into the current mindset. It’s 1990 and we’re on the waning edge of a bull market, the likes of which everyone said we’d never see again. If you bought a home in 1990, it was worth less in 1991. If you panicked in 1992 and tried to sell, you might have had to bring in extra money to close escrow. 1993 was tough too. It felt like you could shoot a cannon through the marketplace and not hit a buyer.

By 1995, things had changed. Values were back to where they were in 1990. By 1997, things were pretty rosy. By 2000, your equity had transformed you into a shrewd real estate investor. By 2003, you were a financial genius and you thought you should have your own late night infomercial teaching others how to share in the wealth. By 2005, you were planning retirement around the equity you’d amassed in your brilliant real estate career!

Now step back and take a look over the scope of that same time horizon. Same house. Changing cycles. If you were in it for the short haul, you could have lost big time. If you were in it for the long haul – it paid off in ways you couldn’t have imagined.

The “Stuff” Prayer

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It’s been awhile since we revisited the subject of “stuff,” a topic that continues to occupy an inordinate amount of my time as a Realtor. What “stuff ” am I talking about? George Carlin stuff. Jam-packed storage unit stuff. Ubiquitous garage, basement and attic stuff. Stuffed into the back of your closet stuff.

The “stuff ” that keeps spawning best-selling books about clutter, the magic of tidying up and Zen fantasies about living like a monk. The “stuff ” that has launched an entire cottage industry of packers, organizers and house- whisperers.

The “stuff ” that keeps many folks waging endless battles with their own bad habits without really knowing why. The “stuff ” that Realtors wrestle with every day when it comes to selling houses. Ask any experienced agent what the biggest hurdle is to getting listings ready? Hands-down most will say: “Trying to cajole well-meaning homeowners into dealing with their ‘stuff ’.”

For reference: it takes two or three weeks to get an empty house prepped and on the market. It takes six months or more when a seller has to purge twenty years of stuff to get it ready. After helping hundreds of overstuffed clients over the years, I’ve come to one inescapable conclusion: selling a house is hard, but finding a home for all the junk in the garage is excruciating.

Near as I can tell, we’re all on the hoarder spectrum. The only difference between those poor souls buried alive by their stuff on reality TV and the rest of us high-functioning hoarders is a matter of degrees. The rationale for hanging on to things long past their useful shelf life is always the same no matter whether you’re navigating through mountains of old magazines or just bending around thirty-year-old skis to get into the car: “What if I need it someday”?

It’s a fascinating time in the culture, a crossroads for aging baby boomers transitioning from the middle third of their lives to the last third. The struggle around “stuff ” is lumped into a whole slew of issues euphemistically referred to as downsizing. Implicit in the term downsize is the notion that a new life in a smaller place means giving up old parts of ourselves we may have trouble letting go of.

Here’s a revised version of the Serenity Prayer for those struggling. God, grant me the serenity to keep the stuff I do need, the courage to throw out all the stuff I don’t need, and the wisdom to know the difference. If that doesn’t help, call me. I’m happy to make a house call and give you some guidance.

How Much is it Worth When it is Free?

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What did we do before Zillow came along? Remember when people had to rely on Realtors to tell them how much their houses were worth? And weren’t able to download values in a matter of seconds?

I’m sure the techie types who started Zillow thought they were making the real estate process more transparent when they unveiled their elegant platform to crawl the web and tap into troves of public record information. Best of all, their algorithms were designed to analyze all that big data in a heartbeat and deliver instant gratification to anyone who was interested.

In the first crush of social media in the mid 2000s, people somehow took it on faith that information on the Internet was free. And because it was free, it was more accurate because it wasn’t coming from people trying to sell things – like real estate agents trying to sell houses. Thus, the ubiquitous meme of the Zillow Zestimate was born.

Fifteen years later, the age of innocence for social media is over. Darker truths are becoming more apparent. We are revising notions about what “free” really means and how easily information can be manipulated into “fake news.” Especially when people accept the false promise of random “facts” at face value and don’t bother spending enough time gathering context.

I’m thinking about a text I got a few weeks ago from a buyer interested in a place I had just put on the market for $849,000 four days earlier. It said: “Your new listing looks great! Let me know when it gets down to the price that Zillow says it’s worth and I would really be interested in seeing it.”

Really? When I looked up the Zestimate it was $747,000, even though it had just received 7 offers in those first four days and was already in escrow for $900,000! He didn’t believe me, of course, and I confess I didn’t try overly hard to convince him.

So much for Zillow. And chalk up another bad case of Buyer Disconnect. Fascinating that people would trust an algorithm more than a person, but that seems to be the state of the world these days. Has anyone seen the recent spate of commercials Facebook is running? Thirty-second mea culpas acknowledging the wrong turn they took along the way.

Zillow is a huge corporation that’s publicly traded on NASDAQ. It was sued not long ago by a disgruntled homeowner who said that a Zestimate had torpedoed his home’s value. Zillow also just announced that it will start buying and selling homes through a new program called “Instant Offer.” Somehow, that just doesn’t sound like a good idea to me.

A Short Stop Along the Periodic Table

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Today 10,000 people in the US will turn 65. In another 5 years, that number will jump further into the stratosphere. At the same time more people will be living longer than their parents did. How does this huge demographic shift relate to the decisions we are making today?

There’s not much mindful public dialogue happening around aging or the loosening fabric of our culture. Just an isolated web of separate discussions taking place among small, compartmentalized groups of friends and family members.

Or between a steady stream of inner voices talking loudly inside each person’s head, looking for some larger voice recognition pattern to fit into. This is my own small attempt to connect the thousand threads of the all those conversations. If it sounds familiar, welcome to the club.

Change. There’s nothing more certain. The entire universe is constructed around it. Any single thing along the continuum we call real or permanent exists only as the whisper of a fragment. A quick shutter of a snapshot taking place in the interlude between infinitesimal moments. A short stop along the periodic table as elements transform into energy and back again.

We are all verbs harboring the illusion that we are nouns. Narratives that keep trying to get a fix on our own stories by using abstract calculus as a plot device. Even though we are creatures of change, there’s also nothing we resist more than the “idea of change.”

Our neural pathways are like well-worn deer trails. The more they are used, the more fossilized they become in the underlying strata. When that happens, we hunker down, start to operate on survival mode and fight to preserve what’s already past.

Why do so many people stay in houses they actively dislike? Or places that just don’t work for them? Because the prospect of change is scary. The known known, no matter how unpleasant, is often less frightening than the unknown known.

When we face the specter of change, it often feels like some shadow of our former self is about to step off the precipice into a bottomless abyss. We become convinced that without our accustomed neural pathways in play, we won’t know who we are anymore. Our ego structure will have to learn how to walk all over again, like a stroke patient trying to recover.

But walk the same way we always did? Or, intriguingly perhaps, in a whole new and different way? And that’s where we’ll stop. With the tiny idea that change can actually be something new and interesting rather than fearful and debilitating. It just might be something to embrace rather than resist.

Magical Thinking

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Let’s return to something we talked about last year…when the frenzy of the market was fraying people’s reserves of rational thought, and I noticed a widening gap between the public’s popular imagination about how real estate works and how it actually plays out in real life.

There are two parts: 1) Every single Santa Cruz seller fantasizes about wealthy buyers swarming over the hill to pay lots of money for their house. 2) Not all Santa Cruz sellers are willing to do what it takes to attract one of those “unicorn buyers” that are so easy to conjure up in their heads.

But that doesn’t necessarily mean that sellers choosing to skimp on their prep are also voluntarily scaling back on their expectations about what those blue sky buyers will pay. No matter which cultural incarnation they assume: rich techie, Facebook/Apple/Google employee, retiring couple from the mythical 650 area code, Chinese national or virtually anyone driving a new Tesla.

From the looks of it, it doesn’t stop some sellers from continuing to ratchet up the $$$ long after the point in time at which they balk at spending one more dime to prepare their place for sale. Almost like it wasn’t necessary to do anything, or even…the less you do, the higher the price should be.

This is this market’s version of magical thinking: aspirational pricing that exceeds reasonable expectation. It’s a trend that will only help hasten the end of an otherwise amazing upcycle. Doesn’t matter whether it is bitcoin or tulips or real estate, things wind down when there’s not enough “there, there.”

It all breeds an odd kind of seller discontent too – in the midst of the best seller’s market anyone in California has witnessed since the Gold Rush. No matter how good the results, more sellers are decidedly unhappy. Five offers? Maybe there should have been ten. Price bid up $50,000 over asking? But we were expecting at least $100,000 over. There’s an embarrassment of first-world problems out there! And way too much Seller’s Remorse.

So here’s the thing, folks. The market is great. But selling in a seller’s market is still hard work. You get out of it what you put into it – and in most cases even more. You can’t take your listing back, once you go on the market. There are no mulligans in real estate. Why not get it right the first time?

The 60 Minutes Syndrome

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Another Home Inspection this week. Another reminder just how risky daily life can be.

Home used to be a place of refuge, a sanctuary from all the bad things that could happen – out there. They used to say most accidents occurred within five miles of home. But after digesting this 60-page tome of an Inspection Report, I’m not sure how anyone makes it out of their home alive these days.

I call it the 60 Minutes Syndrome. Goes something like this: Morley Safer (suspicious show biz name) does a riveting exposé on the dangers of garage door openers – the ones that pin unsus- pecting children and pets helplessly underneath. By the following week, consumer protection advocates are calling for new auto-reverse safety mechanisms.

By the following year, Home Inspectors are citing chapter and verse about brand new garage door codes. They understand (after a lawsuit or two) that if they don’t warn everyone about every possible thing that could harm them, their own asses may be in grave danger. CYA rules. Absolute CYA rules absolutely.

Real estate has moved into strange territory. Caveat Emptor (Buyer Beware) has been replaced by Caveat Venditor – Seller Beware – of all those things that can scare the heck out of potential buyers. Home Sweet Home. How can it kill, maim or injure thee? Let me count the ways… Here are just a few of the dangers you never knew you had to worry about…until now:

Does your oven have an anti-tip device? Ever seen an oven fall over on someone? Not pretty.

That naked light bulb hanging in your closet? Stack those sweaters high enough and it’s a fire waiting to happen.

That old dryer vent? It’s filling up with combustible layers of lint as we speak.

How many dyslexic plumbers have installed hot and cold water lines backwards? A special invitation to unexpected scaldings.

Is every stairway a potential stairway to heaven? Risers too high? Too wide? Treads uneven? Handrails too wide to grip?

Deck rails more than 4 inches apart? That’s just wide enough for small heads to get stuck.

And the list goes on…GFCIs. CO2 Detectors. Smoke Alarms. Pool Alarms. Ban all extension cords. Install tempered glass. Clamp open the damper on your gas fireplace. Replace the sharp screws in your electrical panel.

When I was growing up, all we had to fear was the atomic bomb. As long as we listened to Bert the Turtle and remembered to duck and cover and didn’t stare directly into the blast, we were fine. Everything else was gravy.