Welcome to the cognitive blog of dissonance called Real Estate of Mind. That’s right, the royal we (me, myself and I) sit back all week and soak it in like a sponge. Then “we” try to wring it back out to you in a way that trips the light fantastic on the razor’s edge of realty, deftly tiptoeing through the leftover mind fields of tulipmania still dotting the landscape.
Call it an odd form of drip marketing. But please feel free to follow the bouncing neuron until you hear your own synapse crackle and pop.
Rumor has it that there was an actual buyer sighting in the Aptos Hills on Tuesday! Another in La Selva! And three spontaneous buyer “outings” were reported on the west side of Santa Cruz the very next day!
They’re there. They can run around but they can’t hide forever. They are going to have to flush themselves up to the surface sometime. When and if enough of them decide they really do want a permanent roof over their heads.
We’ve got good news and bad news for you Sellers in our studio audience today.
First, the number of single family transactions closed in March was significantly higher than those that blossomed in March of last year – 164 real deals vs.128!
That puts us 40 transactions ahead of 2010’s 1st quarter results. I guess we can say, with the certainty of big bold font that SALES VOLUME IS UP IN 2011!!! There’s a headline we can hitch our wagons to! Giddyap!
The bad news? Sales have increased but the median price has slipped well below $500k – three months in a row. We’d have to ask Sherman to fire up the Way-Back Machine and chauffeur us to 2001 to see the last time prices were mired in the $400’s. Of course, a decade ago we didn’t see it as “mired.” We were happily moving up. Not ratcheting our way down.
And condos? Uh. Not a pretty picture on the stat charts. One more unit actually closed this March than March of last year. A score of 29 to 28 if you are keeping track for your rotisserie real estate league. But the same marketplace managed to suck the oxygen out of the prices on those condo sales. Without cabin pressure, the median fell to earth and hit $250k. You definitely have to recede to the turn of the millenium to find that price point.
A reminder to those who always ask the question: “Are condos a good investment?” One answer is: “Yes and no.” The real answer, like anything else market-oriented is: ” Depends on when you buy ’em in relation to when you sell ’em.” Timing. timing, timing (not location, location, location) is God when it comes to real estate. You might want to friend the 4th dimension on Facebook if you haven’t already.
Condo sales & prices generally trail the single family market up. When the cost of regular old houses graduates beyond the level most people can afford, more buyers begin to look at the next best choice – condos/townhomes/puds. Suddenly demand skyrockets and overwhelms the supply. Condo Sellers are in luck.
Conversely, condos lead the way down, when the price of single family homes drops. When, people can afford it, most would rather own their own piece of the rock instead of sharing it with strangers.
Condos appreciated much faster than single family homes did in 2005-2006. A great investment for those who got in and out at the right time. But as March’s median tells us, some who thought they knew when to hold are now learning what it’s like to fold.
Just a few more realty bytes to digest as brain food for thought: The median for single family homes peaked in 2005/2006 at $790K. Condos peaked at $572K in 2006. Last month 40 to 50% of the closed sales were distress sales. With more on the way. An increasing number of purchases were all-cash. Less lenders. Less tortuous qualifying. Even with exceptional interest rates.
Expert economists are now revising the revision of their formerly revised opinions. They say the real estate market will continue to weaken till the end of the year, before we see a modest recovery. Now if they can just define ‘modest recovery’ in terms everyone can understand, the prognosis will mean something.
In the meantime, let’s go back to the good news and bad news of the moment. Sellers, think of yourselves as one collective body. One group mind. One global consciousness. What would make it a better market for you? More sales? Or higher prices? You only get to choose one. Which one are you willing to take? Name your poison.