Bread Crumbs and Sins of Commission

BreadcrumbsToday’s premise?  The real estate market isn’t always what it’s cracked up to be. What people think or hope it is. Or what people like me lead you to believe it is on occasion.

Pause.

Do we Realtors make it up as we go? Do we selectively parse and present information in ways designed to “sell” a story-version of the marketplace to create more sale opportunities?   Do we coax you on with little sins of omission like bread crumbs leading to the bigger sins of our own commissions?

Do we just tell you what we want you to hear? Using some special super-duper-power to ferret out and push willy-nilly buttons of fear and greed?  Is it all about stoking the market to burn bigger and brighter for as long as it possibly can?  Turning busts into bubbles.  And bubbles back into busts again?

Well, I can’t speak for the innermost thoughts and motives of all my colleagues, but I think perhaps Agents,  like everyone else,  get caught up in the heat of the market’s moments at times.  Ask me how the market is doing on a week I’ve closed 3 escrows,  and I  might wax over-optimistically about the future.  Catch me towards the end of a dry spell and I might lapse into a litany of doom and gloom citing all the reasons why the end of real estate as we know it is rapidly approaching.

We’re human.  We’re fallible.  We’re subject to the vagaries of our own biorhythms.  We’re occasionally discerning and astute but we’re certainly capable of losing sight of the nose that’s sitting plain as day, right in front of our faces (although for reasons mostly genetic in nature,  I don’t seem to have that problem).

Today’s experiment?  I’m going to share some observations culled from recent experience.  I’ll make them as honest and off-the-cuff as I can. I’m not going to try to weave them into a storyline for you.  I think it’s better for you to think about them first. Formulate a story of your own.  Then, we can compare stories. Talk about what all these things might mean.  See if we can put the pieces of the puzzle together in a way that makes sense.

Here goes:

So far this year, real estate has had a remarkable run.  The speed and extent to which things seem to have recovered has been stunning.

There were properties in March that I knew I’d have at least 10 offers on in the first week.  I don’t have that same level of confidence right now.

The market seems to have hit a lull. Taken a bit of a breather.  It’s doesn’t appear to be losing ground. Just not gaining as much ground as fast.

I’m not overly worried about where the market is going – just not irrationally exuberant about it’s future.

Title Companies apochryphally report that newly opened escrows have slowed in the last three weeks.  Some mortgage lenders have said that the number of new purchase loans has fallen off.

Seems like each new listing coming on the market has tried to push the price point  another $25,000 – $50,000.

Buyers seem to be pushing back.  More of them seem to be taking a pass and sitting out situations involving too many multiple offers.

Most of the run-up in prices and the vast majority of the transaction activity has been in the $400k to $750K range for single family residences.  And in the $300 – $450k range for condos.

Listings and Sales in the $800k to $1.2k zone are nowhere near what they were in the heyday of 2005 – 2006. The move-up market of the past is conspicuously absent.

There are a whole lot of active listings above $2.25 million that are not getting a lot of showings. Several over $10 million. Nothing has sold above $2.2 million in 2013. There is nothing in escrow above that amount either.

Facebook was a bust.  Apple isn’t perfect anymore. There wasn’t a wave of other IPOs. The nature of the rebound in Silicon Valley seems to be fundamentally different than it was in the past.

Interest rates have jumped a half point recently. The DOW remains in record territory.  It’s still a full documentation loan lending environment.

I’m going to leave it there for now.  Munch on those things for a while. Next week – I’ll toss some more your way.
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