How does the average person really know when “things” are better? The economy. The real estate market. Life in general. Where’s the tipping point? How much evidence has to be gleaned from the world around us, before our internal compass shifts and we cross over from the dark side to brighter days ahead?
Do we simply think things are better in our heads? Is that enough? Or do we just feel like the cumulative balance of life is better – for no one specific reason we can name. Just sort of a collection of little things?
There are all kinds of economic indicators that offer glimpses into the hidden processes going on in our collective hearts and minds. Indexes that try to measure the subtle, changing orientations of our belief systems that in turn regulate our participation in the world’s consensual reality.
Old standbys like Consumer Price Index, Gross National Product, Durable Goods, Trade Deficit, Housing Starts. Not to mention a slew of slightly more esoteric gauges like: Unclaimed Corpse Indicator, Men’s Underwear Index, Baby Diaper Rash Indicator, Mosquito Bite Indicator and the Latvian Hooker Index.
Since Santa Cruz has more “I Like Dogs and I Vote” bumper stickers per capita than anywhere else in the world, it’s comforting to know there’s even a Dog Index based on the theory that when things get better more people get dogs.
(Just in case you dog-likers are wondering, India had the fastest growing canine population in the world between 2007-2012 at the same time the number of man’s best friends in Switzerland dropped a whopping 10%.)
Me? I confess I’m a skeptic. A contrarian’s contrarian prepared to tilt at any paradigm propped up in the way. I can never quite justify the results of the Consumer Confidence Index with those of the Misery Index to my own satisfaction. I know that the Case Schiller Index says real estate prices were up nationwide 3% in September but am I better off now than I was four years ago? Yes and no. Four weeks ago? No and yes. Biorhythms are tricky things to pin down with algorithms.
But I do have my own personal Real Estate Index I’ve developed over the years. It’s a bit informal and I haven’t gotten around writing the computer program yet. I call it The Car Wash/Grocery Store/Cocktail Party Chat Index. A seat of the pants meets gut instinct ball park yard stick.
Here’s how it works. As I make the rounds each week I keep track of how many people approach me and volunteer something like: “The market’s up, right Tom?”
It’s not really a question. It’s an invitation. It’s code that says folks want to engage and talk about real estate. And to do that they must be feeling better about little things they are hearing and seeing about real estate. And the balance of the bigger picture must be shifting a little further towards the light at the end of the tunnel.
More people wanting to talk about real estate is a great sign. Talking is one of real estate’s most positive leading indicators. It always precedes doing something that’s real – like buying or selling a home.
There were a number of years there where subjects like real estate and those great rates and that latest refi and what the house down the street sold for and how many offers that listing got and should I remodel or buy another home never came up. They weren’t part of the conversation.
But without question, the Chat Index numbers are way up. Right along with the Random Phone -E mail-Search Engine Inquiry Index. The market is stirring.
Does that mean that the whole market is better? Straight across the Monopoly Board? Well…not quite. I think it’s safe to say that demand for the Baltics and Connecticut Avenues and St Charles Places of the marketplace is running high. The biggest question is: How do we get a little more action going on those Indiana Avenues and Marvin Gardens not to mention North Carolinas and Park Places?
Next week we’ll talk about the “sweet spot” in the current marketplace and what needs to happen to ratchet it up a few more notches into the higher rent districts.