Excuse all the cognitive scatter mixed with the chatter. Just more of my epistemological ramblings as we take another leisurely stroll through the garden of forking paths. That maze of the alternate realities unfolding in people’s lives as their choice of directions in the realty world are played out.
These days we tend to think of the twin acts of buying and selling a home as separate processes. Ones that are growing increasingly distinct and divorced from each other. Moving in opposite directions – rather than further along on a healthy continuum.
This is a huge shift. It wasn’t always the case in other markets and other times.
Remember when we actually had a robust move-up market? Or more of a consciously driven move-down market?
Yeah, it’s true. There were actually lots of people who bought and sold simultaneously or with only a slight delay, as a natural function of an “organic” marketplace. Buying and Selling. The two were inexorably joined at the hip. There was an intrinsic belief in a positive future just as there were people who chose to scale down because they wanted to – not because they had to.
The fact that so many of today’s sales have a distress component attached to them – REO’s, Short Sales and all the other varietals of Pre-Foreclosure along the spectrum – means there are no “second legs” to these transactions. One and done. These sellers aren’t going to be buying another place anytime soon.
Instead they’re joining the lost tribe of tenants in lieu of a deed. A separate reality lodged in a parallel dimension of rental property that exists one street over on the other side of the track. It’s a sad, counter-cyclical irony that rents are rising exorbitantly even as sales prices continue to plunge and plumb the depths.
And even while the ranks of the renters are swelling that demand, many of today’s would-be buyers are first timers – trying to leverage their way out. Leave their rental lives and lifestyles behind. But there is no precipitating sale on the front end to lend escape velocity to their quantum leap. And there are far fewer lenders willing to lend launch fuel to their efforts as well.
A good percentage of other purchases these days are coming from all cash buyers. Those who don’t have to sell anything in particular to buy something. Investors, speculators, collectors, second home beach buyers – most looking to capitalize on the market through the use of their capital.
Nothing wrong with this of course – except that the market could use the additional sales that often used to accompany these kinds of buys. How many 1031 Exchanges do we see happening now? Where has the ubiquitous ‘Starker’ disappeared to in this increasingly stark marketplace of ours? When more buyers/sellers were trading up, down, over, under, sideways through the market there were alot more transactions to go around.
Real estate was fluid. It flowed both ways in resonant wavelengths. Back and forth. Buying and selling. Selling and buying. Together they filled up the economy.
I get the feeling that half of the Country is waiting for housing to lead the economy out of the wilderness and back to the promised land. While the other half is waiting for jobs and productivity to ramp up and provide the kind of traction that will allow the housing market to recover and follow in its wake. Are we the chicken or the egg? The stimulat(or) or the stimulat(ee)? Now that word “stimulus” is off limits at the White House.
Will real estate lead? Follow? Or just stay the hell out of the way on some forgotten cul de sac? What would a giant contingency offer look like? One that we could all buy into? One that the economy could make to the economy and have the economy find acceptable? One that would sound attractive to us as both constituent buyers and sellers? One that would encourage more of us to become one and the same again?