A couple of weeks ago, I was scratching my real estate of mind out loud. Wondering whether our market might actually be shifting gears. Taking a breather? A little less wind billowing out those sails (sales)? Less collective fluffing of real estate’s recently invincible aura going on?
DESPITE ALL THOSE HEADLINES WE KEEP READING. Median price jumps. How hot San Francisco is. All-cash Chinese Investors buying bazillion dollar places sight unseen.
This of course, after four sad years of doom and gloom and a steady diet of after-the-end-of-the-world real estate woe up until…well… just an incredibly short time ago! Talk about Mr. Toad’s Wild Ride! Sometimes it’s hard to tell whether the market is coming or going.
I’ve been trying to share some of the quizzical and very equivocal observations I’ve been collecting in my daily travels . In the here and now. In Santa Cruz. Not anywhere else. In real time. Not tape-delayed.
As some pundits point out: There is no such thing as a National Real Estate Market. Only a local one. Or at best a regional one. What may be true in Las Vegas or Phoenix real estate-wise isn’t necessary the case here in Tree and Sea Paradise. North Dakota may be en fuego in terms of jobs and rising home prices. But I’m not feeling a lot of warm and fuzzy connection with whatever the nitty gritty is in the heart of the great plain states.
Fact is, Santa Cruz median prices blow most of the rest of the country away. And our average rents would easily service the mortgage on most mansions in Mississippi. We’re different than most other places. But we kinda knew that already didn’t we?
A few columns back, I tossed out some random ideas for your consideration. I also made a pledge not to try to tie them all up in a neat little package for you. Our brains love to make little stories out of everything. Beginning. Middle. End. We crave certainty. We want it all to make sense. All the time.
From my vantage point the only way to navigate gracefully through real estate is to embrace its ambiguity. Accept the fact that it’s going to push and pull us in a dozen different directions at once. From a buyers perspective. From a sellers perspective. From someone trying to do both at the same time’s perspective.
There’s no one truth. No such thing as a good market. Or a bad market. Only the market. When prices were falling – was that bad for buyers? When prices were running through the roof was that good for buyers?
F. Scott Fitzgerald said: “The test of a first-rate intelligence is the ability to hold two opposing ideas in the mind at the same time, and still retain the ability to function.”
Welcome to Real Estate! Whether we embrace its ambiguity or not, we still need to live with it. And keep functioning.
Here are few of the fascinating push-pulls our real estate market has wrestled with in recent times and some we will undoubtedly continue to scratch our heads and wonder aboutt:
– A buyers’ market with almost nothing to buy. No inventory.
– Buyers competing with multiple-offers in what was supposed to be a buyers’ market.
– Historically low interest rates stifled by full documentation loan regs and a credit crunch.
– Multiple-Offer Price Overbids jumping too far ahead of the trailing appraisal curve.
– Sellers who would like to sell but can’t quite figure out where to go. Or how to get there.
– Rising interest rates that will either scare more buyers off the fence or inhibit their ability to purchase altogether.
– Rising interest rates and full doc loan regs that limit how much buyers can afford and how high prices can go.
– Rising prices that refuse to trickle up into the higher price ranges. The heat of the marketplace stuck below a glass ceiling around $800k.