OMG. Almost the end of the first quarter already? Time sure flies when you are having…whatever this is. I’m sure someone will invent a term for the magnus opus of malaise we’re caught up in. Some clever meme that sums it all up. Maybe we’ll vote it in as word of the year – joining other worthy winners from our recently checkered past – subprime (2007) and bailout (2008).
In the meantime, let’s quote Kenny Rogers (the way-back version) and say that we’ve “just stopped in to see what condition our condition is in.”
So what is or isn’t happening in real estate as far as we can tell?
Number of Sales? Steady or flat – depending on which implied meaning your bio-rhythms favor at the moment.
Steady as in not going “down” in the first two months of this year compared to last year – January (94) and February (96)? That’s good right? Not falling off the face of the earth.
Flat as in nowhere near the surge we were hoping to see when we bought into last year’s optimistic projections for this year. The worst over. Recovery just around the corner.
And certainly flatter than flat when compared to December’s closings (127). But then there is never any shortage of excuses for poor sales in January and February. Dog ate my contract. Grandma died before I could qualify for a loan. It’s raining and no one buys a house in the rain. Even though January sales had no trouble peaking at 154 and 160 in ’04 and ’05.
The more immediate question is…are we going to see the same rebound in March this year that we saw last March (128)? Hold on to your short sales folks. The jury is still out. But my gut tells me, we’re going to be disappointed. Get ready for more loose lips talking double-dips.
Median Price? Whoa. What happened? After floating between $500,000 and $550,000 most of 2010…the median suddenly hit the wall in January and fell to $430,000. A slight uptick in February to $450,000…But where have all those tulips gone? Long time passing I’m afraid. I think we may see a median closer to $500k for March’s closings, but they’ll be issuing a whole lot more AARP memberships before we ever get back to the $700k median prices we saw circa ’05 – ’07.
Make a note: If you are waiting patiently for it all to come back around to the glory days in order to make a more graceful exit from the market, make sure you’ve got plenty of survival food stocked.
Quality of Inventory? Lousy. Very little new coming on that’s exciting. And exciting these days means: great house, three price notches lower, move-in condition, motivated seller prepared to deal even further. Most of the inventory consists of over-priced, lukewarm, left-overs from last year and a steady stream of depressing places addressed for distress.
Multiple Offers? Yep. A surprise in such a decidedly tough marketplace. The majority of choices are so poor that buyers are jumping at anything reasonably priced that embodies a modicum of quality, charm and nice setting. “Organic” buyers trying to buy “organic” listings are incredibly frustrated by this trend. They don’t want to compete. It calls into question the very notion of a “buyers market.”
Buyer Psyches? Almost every buyer will tell you it is an incredibly good time to buy. They’ll parrot the fact that prices are down and interest rates are great…just before they tell you that they aren’t in any hurry. Translation? They’re scared to death that the market is going down further and aren’t afraid it is going up anytime soon.
Seller Pysches? Almost every Seller will acknowledge that the market has gone down quite a bit from the peak – with the exception of their own house, which has gone down a lot less. For one of a variety of good reasons: extra improvements they’ve made, an appraisal from two years ago, because they really need the money.
Seller Capitulation? Slowly. Not surely. Unsteadily forward in fits and starts as individual Sellers continue to work through the different stages of their grief: denial, anger, bargaining, depression, acceptance. The majority aren’t there yet.
Biggest Fantasies? First the Chinese were going to come over and buy up all the real estate. Now it’s a new generation of Facebook millionaires poised to kick the market into high gear – any day now.
The Big Three? Same as they’ve been. Same as they will be: 1) More better jobs. 2) Easing of the credit crunch. 3) Significant reduction in the shadow inventory. Without multi-tasking some resolution on all three fronts we’re going to be right back here at the end of the second quarter of 2011, wondering what happened.