Flood of New Listings?

flood-learn

This is for all the would-be buyers waiting in the wings. Those taking a temporary break from the rigors of the real estate market after experiencing months of frustration and fatigue.

The ones who are girding their loins and girding their loans in preparation for the coming year’s battle. Hoping to rest and recuperate now, so they can be ready for the flood of new listings they are hoping will arrive.

There are plenty of leftover buyers out there who gave it their all in 2019. They deserve an A for effort, even if they weren’t quite able to make it over the hump to the promised land. Well-qualified folks who just couldn’t seem to out-smart a difficult market and find their way home.

It’s hard to live a normal life and look for a house at the same time. That’s particularly true in a market that demands such an exhausting state of readiness and preparation at the same time as it only parcels a few meager listings at a time to choose from.

Buyers who’ve been slogging around in the trenches in search of inventory for the last six months or longer know what that “always on” feeling is like. The barrage of search engine emails that begins to look like spam rather than real opportunity. Hours spent parsing Sunday open house ads trying to figure out whether “charming” really means “fixer” or whether “cute” really means “tiny.” And whether they should drop everything, jump in the car and head out to the open house to see for themselves.

The rush of an unexpected For Sale sign popping up in the perfect neighborhood.
The promising sneak peak of a new listing on Thursday’s Brokers Tour. The call from a sister-in-law who heard a rumor about a friend of a friend thinking about putting their house on the market. God forbid you should take a vacation and miss that once-in-a-lifetime opportunity that could happen at any moment.

On again, off again. Hurry up and wait. All dressed up with no address to go to. Weeks and months of looking hard but finding nothing. Until suddenly, a house appears out of the blue. It’s perfect…except for the fact that five other buyers with competing offers seem to have had the same revelation.

So many questions for all those would-be buyers lining up in the queue. What are they waiting for, exactly? Is 2020 really going to be any different? Is that flood of new listings really on its way?

Clicks and Confusion

funny-confused-quote-6-picture-quote-1

I’ve been in a contemplative mood lately. Something that often happens when the
winds of real estate settle into their customary calm this time of year.

Most buyers are on a furlough until after the first of the year. That’s when they’ll push the reset button and venture back into the fray. And most sellers have their sights set on 2019 and are busy prepping for early spring. For now, I’m enjoying a little distance from the daily grind.

There’s been a nagging notion rolling around in my head this year. Maybe it’s a symptom of the bigger anxieties floating around in a world that seems increasingly wired by negative emotions. The uncomfortable feeling I’ve had is that real estate’s growing reliance on technology isn’t such a good thing.

I’m haunted by a quote from a former Facebook employee echoing Ginsburg’s seminal line: “I saw the best minds of my generation inventing new ways to make people click on things.” When I look at real estate and how the process works these days, I can see ways it is headed down the wrong path.

I meet hundreds of people at open houses and because I’m curious, I always ask about their experiences with buying or selling. Recently a theme has emerged from all the random sampling I’ve done.

More often than not, people describe being confused or frustrated about their recent real estate ventures. They often talk about feeling left in the lurch without any context about how all the separate parts, moving with dizzying speed, actually fit together into a whole.

They complain about never really talking to their agent. How she/he only texts them. About being left alone to fend for themselves on the internet. Or about receiving Dropbox links with hundreds of pages of inspections without any explanation, until a second email arrives asking for their electronic signatures on each page to prove they’ve read them.

There’s a powerful drive to translate everything we do as Realtors into a one-size-fits-all digital format. To go faster and to paint our clients’ lives by the numbers with newer and better algorithms. To boil their decision-making down to a series of 1s and 0s for our own good, and supposedly theirs.

It doesn’t help that we live right on the edge of Silicon Valley, where a huge percentage of buyers and sellers participate in the larger tech economy surrounding us. Life and work via the internet is what’s expected here. If you don’t have it, you aren’t successful. And if you can’t embrace it – it’s time to get out of the business.

Next week: How real estate should learn to live with and without the internet.

Secret Dreaming

learning-while-sleeping-neuroscience-shutterstock-686222875-1068x601

Buying or selling a home is never just about buying or selling a home. There’s always a more interesting story weaving its way around the more mundane aspects of the “real estate process.”

The house, the offer, the negotiation, the escrow – all the things we like to think of as real estate – are really just stage props and window dressing. Tips of a much larger story about people’s lives that lies hidden beneath the surface of every transaction.

Ask any Agent. They can tell you. Every home sale could be written as a novel or a Greek tragedy full of fate, pathos, hubris and profound changes of fortune. Each could easily become a TV mini-series or a future binge on Netflix.

Every home sale has a unique story about the human beings involved. People going through major life transitions (births, divorce, aging, death et al.) Ones that involve their largest asset as well as their core feelings about safety, comfort and refuge (a.k.a Home).

If real estate were only as simple as those young yayhoos on Million Dollar Listing make it out to be. The true cost of living index is much more complicated than the shallow fodder they dish out.

Here’s the thing: the real payoff for Realtors lies in witnessing the intimate stories about change that happen every day. After 30 years, I’ve amassed an amazing library full of life’s rich- ness. Heroic feats. Stupid human tricks. People slaying dragons. People snatching victory from the jaws of defeat.

I feel both blessed and cursed at times. Bearing witness to the good, bad and ugly of human nature offers a powerful vantage point as well as a precarious perch in the eye of the storm. What comes out of all these individual stories is a deep feeling for the pulse of the culture that surrounds us. The culture we don’t always notice we are part of while we’re busy trying to live.

What also emerges from all the stories is a glimpse of the secret dreaming beneath all of the exterior trappings people cloak their lives with. People think a lot of stuff. And people say a lot of stuff. But real estate is the place where, in order to buy or sell a house, people actually have to do something. Home is the nexus where change resides.

It’s a fascinating irony that we live in a world linked closer than ever before – at the same time so many people feel more alone and isolated than they’ve ever been. Next week we’ll explore how people’s desire for real connection in the world is reflected in the real homes they choose.

Mothballing Open Houses?

Comet Moth 1_0313

There was a time, ten or fifteen years ago, when I was convinced that traditional open houses were a thing of the past. Turnouts were diminishing. Visitors were a motley collection of looky-loos, nosy neighbors and tire-kickers drawn like moths to the corner signs and a chance to peek behind the scenes of someone else’s home and life.

I was almost ready to mothball my open house signs, ditch the cookies and hold the presses on all those glossy flyers I was printing at the expense of all those trees. At best, open houses seemed more like tools for younger agents to meet occasional living, breathing buyers. At worst, they were a way to pitch future listing services to all those nosy neighbors. None of it was really about selling the actual houses.

But I take it all back now. The advent of the low inventory market has changed everything. Open houses are once again a crucial part of the home selling process. Anyone who doesn’t do them hurts their chances to get the best results.

Here’s my thinking:

Every new listing is digitized and instantly downloaded to the market. The right audience is already out there waiting for the details.

Most buyers come from outside the county. Traditional move-up buyers who fueled past markets are missing from today’s equation.

Given daily traffic congestion, buyers from elsewhere don’t drive to Santa Cruz during the week to look at house – they can’t.

Most buyers reserve weekends to see new listings. They prefer to schedule their own time, drive their own cars and see things at their own pace.

In a multiple-offer marketplace, the goal for sellers is: generate the most showings in the shortest period of time after their house goes on the market.

Open houses act as effective funnels to collect, concentrate and clarify market interest incredibly quickly, usually the first weekend after a listing goes on.

For sellers, there’s nothing better than having swarms of buyers all eyeballing each other at the same time, trying to size up all the competition. That’s what motivates buyers to write offers quickly and competitively.

Time Horizons

g.foolcdn

Buyers, have you noticed how much juicy inventory has been piling up? Suddenly there are more homes for sale than there have been for a long time. And it doesn’t look like most of them are going to be jumping off the market anytime soon.

There’ll be lots more choices going forward. You won’t have to have commit your life savings to a place you’ve only seen for a few minutes. And you won’t find yourselves locked in multiple-offer combat vying with ten other buyers for the same place. And you won’t have to feel so galled by greedy Sellers playing puppet-master with your emotions.

The tide is turning. Power is shifting away from an abject sellers’ market to a much more balanced one. Where confident Buyers have more say and a modicum of sway in how fu- ture transactions go down. So here’s the million dollar question: why aren’t you more excited? After six years of looking for some kind of leverage over sellers, isn’t this the kind of real estate you wanted?

More inventory? Softer prices? More negotiating room? What’s not to like? Why is the big worry suddenly: “What if I buy a house today and it’s worth less six months from now?” When did short-term doubt become a such a viable substitute for long-term decision making?

Let’s take a quick trip down memory lane and look for some insight into the current mindset. It’s 1990 and we’re on the waning edge of a bull market, the likes of which everyone said we’d never see again. If you bought a home in 1990, it was worth less in 1991. If you panicked in 1992 and tried to sell, you might have had to bring in extra money to close escrow. 1993 was tough too. It felt like you could shoot a cannon through the marketplace and not hit a buyer.

By 1995, things had changed. Values were back to where they were in 1990. By 1997, things were pretty rosy. By 2000, your equity had transformed you into a shrewd real estate investor. By 2003, you were a financial genius and you thought you should have your own late night infomercial teaching others how to share in the wealth. By 2005, you were planning retirement around the equity you’d amassed in your brilliant real estate career!

Now step back and take a look over the scope of that same time horizon. Same house. Changing cycles. If you were in it for the short haul, you could have lost big time. If you were in it for the long haul – it paid off in ways you couldn’t have imagined.

The “Stuff” Prayer

toomuchstuff

It’s been awhile since we revisited the subject of “stuff,” a topic that continues to occupy an inordinate amount of my time as a Realtor. What “stuff ” am I talking about? George Carlin stuff. Jam-packed storage unit stuff. Ubiquitous garage, basement and attic stuff. Stuffed into the back of your closet stuff.

The “stuff ” that keeps spawning best-selling books about clutter, the magic of tidying up and Zen fantasies about living like a monk. The “stuff ” that has launched an entire cottage industry of packers, organizers and house- whisperers.

The “stuff ” that keeps many folks waging endless battles with their own bad habits without really knowing why. The “stuff ” that Realtors wrestle with every day when it comes to selling houses. Ask any experienced agent what the biggest hurdle is to getting listings ready? Hands-down most will say: “Trying to cajole well-meaning homeowners into dealing with their ‘stuff ’.”

For reference: it takes two or three weeks to get an empty house prepped and on the market. It takes six months or more when a seller has to purge twenty years of stuff to get it ready. After helping hundreds of overstuffed clients over the years, I’ve come to one inescapable conclusion: selling a house is hard, but finding a home for all the junk in the garage is excruciating.

Near as I can tell, we’re all on the hoarder spectrum. The only difference between those poor souls buried alive by their stuff on reality TV and the rest of us high-functioning hoarders is a matter of degrees. The rationale for hanging on to things long past their useful shelf life is always the same no matter whether you’re navigating through mountains of old magazines or just bending around thirty-year-old skis to get into the car: “What if I need it someday”?

It’s a fascinating time in the culture, a crossroads for aging baby boomers transitioning from the middle third of their lives to the last third. The struggle around “stuff ” is lumped into a whole slew of issues euphemistically referred to as downsizing. Implicit in the term downsize is the notion that a new life in a smaller place means giving up old parts of ourselves we may have trouble letting go of.

Here’s a revised version of the Serenity Prayer for those struggling. God, grant me the serenity to keep the stuff I do need, the courage to throw out all the stuff I don’t need, and the wisdom to know the difference. If that doesn’t help, call me. I’m happy to make a house call and give you some guidance.

How Much is it Worth When it is Free?

zillow-zestimates-accurate-or-not-1080x629

What did we do before Zillow came along? Remember when people had to rely on Realtors to tell them how much their houses were worth? And weren’t able to download values in a matter of seconds?

I’m sure the techie types who started Zillow thought they were making the real estate process more transparent when they unveiled their elegant platform to crawl the web and tap into troves of public record information. Best of all, their algorithms were designed to analyze all that big data in a heartbeat and deliver instant gratification to anyone who was interested.

In the first crush of social media in the mid 2000s, people somehow took it on faith that information on the Internet was free. And because it was free, it was more accurate because it wasn’t coming from people trying to sell things – like real estate agents trying to sell houses. Thus, the ubiquitous meme of the Zillow Zestimate was born.

Fifteen years later, the age of innocence for social media is over. Darker truths are becoming more apparent. We are revising notions about what “free” really means and how easily information can be manipulated into “fake news.” Especially when people accept the false promise of random “facts” at face value and don’t bother spending enough time gathering context.

I’m thinking about a text I got a few weeks ago from a buyer interested in a place I had just put on the market for $849,000 four days earlier. It said: “Your new listing looks great! Let me know when it gets down to the price that Zillow says it’s worth and I would really be interested in seeing it.”

Really? When I looked up the Zestimate it was $747,000, even though it had just received 7 offers in those first four days and was already in escrow for $900,000! He didn’t believe me, of course, and I confess I didn’t try overly hard to convince him.

So much for Zillow. And chalk up another bad case of Buyer Disconnect. Fascinating that people would trust an algorithm more than a person, but that seems to be the state of the world these days. Has anyone seen the recent spate of commercials Facebook is running? Thirty-second mea culpas acknowledging the wrong turn they took along the way.

Zillow is a huge corporation that’s publicly traded on NASDAQ. It was sued not long ago by a disgruntled homeowner who said that a Zestimate had torpedoed his home’s value. Zillow also just announced that it will start buying and selling homes through a new program called “Instant Offer.” Somehow, that just doesn’t sound like a good idea to me.