Monthly Archives: June 2010

Are We There Yet?

It’s official.  As of this week, Real Estate of Mind has been rattling around in my head and floating around in the local ether in one paper or another for twenty years now. Are we there yet?

I remember going through the Anthony Schools course. Religiously cramming every factoid I could get, into my brain. I was a true believer.  A supplicant vying for admission into the secret order of all things REAL.

Fittingly, I took my licensing exam in the Scottish Rites Hall in San Francisco surrounded by 500 other eager wannabes. Walking out afterwards, I experienced a huge core dump as all the information I had just memorized, spontaneously fled my body.

I didn’t know it then, but that was my first auspicious real estate sign. I was ready.  I had to empty myself of everything I already thought I knew and just start practicing real estate each day in order to find the hidden grail that it holds.

Along the way I’ve shown property at midnight, written offers on the hood of a car, gotten frantic  buyers remorse calls at two in the morning and once listed and sold a property in less than five hours. Along the way, I’ve met looky-loos, nosey-neighbors and tire-kickers by the score.  Along the way, I’ve represented buyers who just had to grind to the very last penny and others who had a million dollars burning a hole in their pockets.  I even saw a client try to bring cash in a suitcase to close his escrow one time.

Along the way, I started carrying a box of Kleenex tissues in the car for those convinced they would never be able to afford a home in Santa Cruz.  Later, I  upgraded to an EpiPen when anaphylactic sticker shock became the norm.   I earned a masters degree in grief counseling with a minor in hand-holding during the early 90’s at the same time I learned what it meant to chase the market down.

Along the way,  I  also learned how to find lost septic tanks by bending ordinary coat hangers into the shape of dowsing rods.  And along the way, I occasionally employed a psychic house cleaner to clear away some of those dustballs of dirty energy that often accrue in people’s lives.   I also hired Crime Scene Cleaners once, when I sold a house that a compulsive hoarder had completely filled with thirty years worth of rotting possessions.

Along the way,  I’ve seen more Michael Jordan posters and more odd and eerie doll and owl collections than you can possibly imagine.  I’ve shown houses where bongs were sitting out in the open on kitchen tables and naked college students were running around totally oblivious.

Along the way, I’ve run out of gas in the boonies with a clients in the car. I’ve come home with a loose key in my pocket after showing ten properties without a clue as to which house, I forgot to put the key back in the lockbox at.  Somewhere along the way,  I seem to also remember sitting an open house where there was a parrot with a huge vocabulary of swear words,  greeting each visitor.

Along the way,  I’ve worked with Tibetan Lamas and the other kind of llamas. I’ve worked with Fortune 500 execs,   motorcycle club members and middle-aged sex therapists – all in the same day.   I’ve  sold ego homes,  wondering how people could ever stand to wander around in that much space and homes under 500 sq ft,  wondering how people could possibly live in them without strangling each other after the first week.

Along the way,  I’ve been called the Bodhisattva Realtor, a spiritual advisor, a consummate professional and a dirt pimp.  I’ve been accused of breaching the NAR code of ethics for humorously suggesting that Realtors should carry a moral compass with them at all times.

Have I arrived? Nope.  I’m still on the bus with the license plate that reads “Further” and yes, what a long strange trip it’s been.  Strange and endlessly fascinating.

Lots of stories but never enough space for the words to tell them. For those who have been asking for a larger print size that’s  more easygoing on their aging eyes… log on to Real Estate of Mind’s  Facebook  Page: www.facebook.com/brezsnysrealestateofmind

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My Brain on Real Estate

It’s not even noon yet and my synapses are already misfiring on all cylinders.  The steady stream of data coming in feels like a bunch of square pegs trying to shove themselves into a dart board full of small, round, empty holes.  My right and left hemispheres might as well be ships passing in the night of day because my deepest gut instincts are in direct disconnect with the spin of information  orbiting a world that’s already wobbling woozily around on its own axis in full tilt boogie.

There’s an image of Adam Smith’s invisible hand of the marketplace, looming large on a video screen inside my head.  It keeps cracking eggs open into a sizzling frying pan while the voice-over in my inner ear keeps saying …”This is your brain on real estate…Any questions?”

Well…yeah. I’ve got some questions.  A  lot of questions.  That’s probably all I do have at the moment. Thank you very much.

Like…what happens when the bottom of the market is going up and the top of the market is coming down at the same time?  What do we call that? And how do we explain that to our clients? Do more and more people and places just get stuffed into a never-ending zone of price and property compression somewhere north of low and south of high?

How dense can it get in that space before the gravity of the situation gives – in one direction or the other?  Can the stirrings at the bottom of the market push the top back up? Or will the weight of all those pie’s hovering in the sky eventually get so heavy, they’ll force a carefully crafted façade of positive perception to fall to earth?

Is there a second dip coming to top off the cone of silence surrounding the shadow inventory of bank-owned properties getting held off the market? Not to mention the shadowier  inventory of  loan modifications not getting done, notices of default not getting foreclosed on, delinquent payments not getting issued notices of default and the next cycle of 5/1 Arm’s getting set (and reset) to appear right around the corner?

Why has the Mortgage Application Index (google it) fallen so abruptly at the same time interest  rates have dropped so remarkably low?  Money at 4.5%?!!  Weren’t they just warning us that rates were going to go up when the Fed Mortgage Purchase Program ended?

Shouldn’t the ranks of eager purchasers lining up to get their pre-approval letters be growing by leaps and bounds?  Aren’t more buyers out there chomping at the bit as summer inventory begins to expand right in middle of their very own buyer’s market?

And while we are asking the questions…even though it is probably true that the market is seasonal and the sellin’ is easiest in the summer when the catfish are jumpin’ and the cotton is high…isn’t it also true that more homes (as in a larger percentage of properties that are actually listed) don’t sell in the summer too? So which is it? Do more homes sell in the summer? Or do more homes not sell in the summer? Or both?

Is this just all about the end of the tax credit for first time buyers that expired on April 30th?   Would first time buyers  really have waited until the second or third week in April to get their loan applications in? Wouldn’t most of them have started their processes sooner?  Did we just move the time horizon up on purchases that would have otherwise happened later?  Like a cash for clunker homes program?  Was this just another version of all of us collectively kicking the can down the road to see if something else might happen in the meantime to pull our asses out of the fire?

Will the real, real estate market ever stand on it’s own again without huge transfusions coming from the Feds?  Or without interest rates being propped artificially down?  Will the private sector be able to make its own rain again? Without a house of cards built on liars loans and credit default swaps.?  Can it pick up the loose reins of laissez -faire even if it feels  very laissez-unfair in the short term?

Is there some secret escape route on the horizon the helps us get out of the Pavlovian Paradigm where we can’t help robbing Peter to pay Paul with yet one more hail Mary pass that leaves the answers blowing in the wind for future generations to figure out?

Time will tell. But not any time soon.  In the meantime, I’ve signed up to have my brain frozen at the cryogenics lab. Wake me up when we get there.

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Virtual Feng Shui

I’m not immune.  I’m just as much of a sucker for good staging as the rest of you  impressionable buyers out there. Those who can’t help falling in love with the stuff in the house, rather than with the “stuff” of the house itself.

I’m in the business. I shouldn’t be so easily swayed.  But those who have been clinically hypnotized before probably recognize the feeling.  Part of your mind knows you are being hypnotized  while it is happening.   That part watches like a detached observer and keeps echoing its escape mantra inside your head: ” I am aware this isn’t real and I can choose to stop anytime.”

Meanwhile, the rest of your brain is so thoroughly engaged in the  hypnotic trance leading you on,  that the “you”  claiming control,  never quite gets around to stopping the experience until it is told to do so.

When I am smitten with great staging. I know I’m being led in someone else’s direction. I know I can snap out of it if I want. But part of me is so caught up in the lure of a lifestyle I don’t live, it’s hard to exercise the option to opt out. I just want to go with the flow that feels so delicious and dream-like.

I remember back in the mid 90’s. There were  model homes for a large PUD tract constructed up on Meder Street.  It was a huge project for slow -growth Santa Cruz. Tons of units to push at a time when the momentum of the market was still dicey.

As the apocryphal story goes, the developers hired a Hollywood set designer lolling around, in-between film jobs. He was given the star treatment and a handsome sum to come to Santa Cruz,  dress up the models and  edit the scenes that prospective buyers would wander into, when it was time for the big premier showing.

Apocryphal or not, this guy had an incredible eye for detail.  An appreciation for nuance.  An innate sense for the imagined moment preserved in amber.  A deft touch for the tiniest vignette of emotion capable of shooting Cupid’s arrow straight into the heart of a buyer.

There was a master bedroom that he painted like a true master.  A fluffy comforter and a warm, earth-tone, bedspread casually tossed and ostensibly turned down like a lazy afterthought, all the while, disguising exacting premeditation and an exquisite flare.  A folding breakfast tray perched nonchalantly on top of the bed. A half-opened Jacqueline Suzanne novel, seemingly suspended in mid-sentence, lying face down next to a ceramic croissant, with a dainty little bite baked out of it and a glass of fresh orange juice standing expectantly nearby (or at least a glass painted half-full to resemble one. )

It was perfect.  It captured the idea of all those luxurious mornings spent lying in bed without a care in the world.  Nowhere to go. Nothing to do. No one to please (as the hypnotist always says). The only requirement inherent in the life portrayed was to indulge oneself in endless days plumping pillows and pampering whatever idle whims might arise.

I laughed out loud when I first walked into the room. I was laughing both at its brilliance and at myself for being so easily sucked in.  It didn’t matter that the notion of long mornings spent dozing happily in a perpetual bed and breakfast, in some parallel universe, was as far away from my real life as I could possibly get.

But here it is. 2010. Ten thousand homes and tens of thousands of stories later. And I still remember that bedroom and what it felt like.  The memory of that false memory is as strong today as it was then.

So, like the character of the Oracle said to the character of Neo in The Matrix:  ” This is really going to bake your noodle.”  Recently,  real estate agents in Southern California have been employing actors to provide “live” staging in some of their homes for sale.  And in this day and age where Redfin and Zillow have become the defacto new “drive-by” experience for most home buyers – content to cruise the internet, rather than actually get in their car  –  virtual home staging has become the new big thing.   Web artists are charging for staging empty houses inside pictures of empty houses!

So, what’s next?  What’s the newest, new big thing? Here’s a tip.  Virtual Feng shui.   Or as I like to call it – Shway to Go.  Sell clip art of crystals,  tiny mirrors, feathers, amulets, Chinese coins  and wind chimes to add to all that virtual staging people are going to be doing in the future.  If you are going to embrace realty, you really have to embrace the illusion and make it feel right.  Right?

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FRACTURING THE FAIRY TALE!

We toss a lot of words around to describe the real estate market. Words that often come with an encrypted charge and a universe of silent subtext attached to them. Words that carry the weight of metaphor and chains of nuance extending far beyond what the sum of their individual letters are meant to imply.

Which is all to say… I’ve never believed in the fairy tale of a “good” real estate market and a “bad” real estate market. These terms never quite cut it no matter how you slice them. They are way too limited or lopsided in interpretation to do real realty justice. Good for who? Bad for who?

If prices are coming down, is that “bad” for everyone in the marketplace? Or just for some Sellers?  If prices are racing up 2% a month, is that “good” for everyone? What about first time buyers on the lowest rung of affordability watching their point of entry vanish upwards on the horizon?  Its not all so “good” for them.

Is it appropriate for us real estate agents to switch our valences back and forth from side to side, becoming devoted advocates of the buy or the sell depending on whether we perceive it to be a great buyers or sellers market? Just to call it all “good”?

How about  a “move-up” buyer?  One that wants to sell a lower-priced house and purchase a bigger, higher-priced home? There’s an underlying logic that suggests a declining market might be the “best” time for this kind of seller/buyer to make his transition.

The theory is:  The lower the price of the house sold, the more demand there is in that niche of the market.  A lower-priced home should fall less than a higher-priced home in the same declining area. Even though he may sell for less than hoped for, a move-up buyer should make up his “loss” on the other end.  He should pay less for that better, more expensive house. Way less than if the market were going up like crazy.

It is the “relationship” between what move-up buyers sell for and buy for that counts. Not the actual, dollar amounts themselves. Specially, if they can lock-in a portion of their new purchase price at near record low interest rates (like now, with Greece greasing the way).  Nothing like cheap money to help make it all come out nice and tidy in the wash.

So what about this market? This time? How to describe it? Good and bad are particularly inept descriptions for the daily phenomena manifesting itself all around us.

Months ago I mused that there should be two multiple listing systems existing side-by-side. One for corporate-controlled distress properties – REOs and Short Sales. And one for those euphemistic “Organic Listings”  – properties being sold by real human beings going through all the normal life transitions that used to drive regular real estate sales – birth, death, divorce, aging, heath -all the biggies.

But now the fragile dynamic between these two markets occupying the same place at the same time is splitting the market apart even further.  The split has become a full-fledged fracture with prices being driven dramatically up on the low end, at the same time the glass bottom is falling out of the market on the higher end.

If you want to feel like Jeckyll and Hyde for a day – start out in the morning looking for properties with a buyer approved up to $500k. By noon you’ll think you’ve mistakenly wandered into a time warp, transported back to 2004-2005. Everything you look at has 4 or 5 offers and is selling for more than list price.

Get some lunch and boost your blood sugar. Shake it off in time to make your 2pm appointment. That’s the one with the Seller who’s $1.6 listing isn’t selling, hasn’t had any offers and is accumulating days on market faster than cobwebs on the sign out front. Be prepared to spend a couple of hours acting as grief counselor and looking for a sensitive window of opportunity to break the news about just how low their price could really go. A different twist in the wormhole has deposited you smack dab in the middle of 1992!

So what happens when energy in the lower chakras is rising too fast at the same time that movement at the top of  the spine is headed for some serious down time? Welcome to the compression zone. That’s the dense little pocket of  the market lodged between the vertebrae of $550,000 and $750,00. The space being pushed together tighter and tighter from both ends. Its the tiny window of choice that more and more sellers, buyers and listings are finding themselves in – with quite a bit of gnashing of teeth and fraying of nerves accompanying the process.

Sound familiar? Get your helmets on and brace yourselves. Next week we venture into the Compression Zone.

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