Help! I can’t hear myself think! They are tearing the roof off my neighbor’s house. My inner sanctum is invaded by chaos. Overrun by the cacophony of discordant strains smashing and crashing through my windows as the construction crew tries to put another story on.
But it’s not the sound of all that ripping away next door that is wrenching the roof off my brain. True, I can’t believe what my ears are hearing. But what I really can’t believe is what my eyes are seeing in the news. That’s the real chalk squealing on my optic nerves. The creepy feeling making me shudder and jump out of my skin.
The story that contractors of spin are trying to put on top of the real estate market is driving me stark raving mad.
What story? The one that starts with…According to the Chronicle, home sales in the Bay Area slumped 23 per cent in July. That’s a belated “told you so” that I take no pleasure in. It seems the news is finally catching up with the truth that all of us in real estate have known in our guts these past months.
We are reminded, for the upteenth bazillionth time, that what most people think they know about real estate is woefully out of touch with the real thing. Numbers and prices quoted in the middle of August, regarding sales recorded in July, have almost nothing to do with where the market really was in July or even June for that matter. Let alone where it is at right now.
It is all trailing information folks. Days late. Dollars short. July sales tell us what the market was doing 60 or 75 days prior. Way back in April and May, when those willing sellers were (or weren’t) coming to terms and making deals with those willing buyers. And the market wasn’t going all that well then, apparently, despite persistent rumors to the contrary.
We’re almost five months behind the curve now. Turns out we’ve been running on fumes. The market hasn’t been that busy since mid spring. But the Industry itself and the Feds have been very busy constructing a different story built on lag time.
Yes, we had palpable energy coursing through our veins back in March. And all those applauding pundits of positivism (perception always creates reality until the house of cards falls and it doesn’t anymore) didn’t let the opportunity pass. They jumped right on it.
They’ve been busy pumping up the volume on real estate ever since. Trying to leverage the hearts and minds of the marketplace into believing that everything was back to normal.
So here’s the part that really drives me crazy. They are still at it. Foisting more missed and dissed information on those who just wanna/gotta believe.
Now that we know sales have been down, what’s the story being used to explain that story?
The Brokers of Illusion have the perfect excuse and aren’t embarrassed to use it. Their answer is simple. There’s nothing wrong with the market itself. The end of the Housing Tax Credit in April is the real culprit. The expiration of real estate’s very own cash for clunkers program has somehow sapped the will of those who would otherwise be lining up to buy.
The notion that the loss of an $8,000 tax credit has much to do with a marketplace like ours is dumb. Dumber than dumb.
Maybe, just maybe, the notion of a one-time rebate of $8,000 could be construed as compelling in a market like Iowa where the price of a decent home is $120,000. But why would any buyer of sound mind and judgment be sold on buying a home, in a place where the median price is $500,000, just so they could get a check back for that relatively measly amount. Doesn’t compute.
The average price and median price in Santa Cruz have both fallen 4 or 5 times that number since April. Interest rates have set record new lows for 9 straight weeks now. Seems like both of those very true facts are way more reason for buyers to step up and buy than the end of the credit would be a reason for local buyers not to buy.
Yes, I know there seems to be a correlation in the time line – end of tax credit and loss of steam in the market. But could it possibly be that the perfect storm of lack of jobs, an incredibly tough loan environment, all the powerful fears that buyers still harbor and an overall economy seesawing on the cusp of a double-dip recession has more to do with the new numbers we are finally seeing?