Tag Archives: Improving Real Estate Market

Market Catching It’s Breath?

Unknown-1I was driving over to Palo Alto this week. Headed up 280, weaving between all the Tesla’s, when I noticed a Prius behind me in the rearview.  It zipped past going 80mph sporting an inconspicuous little bumper sticker that read:  “ Please God, just one more bubble.”

I had to laugh because it gave perfect expression to so much of the big dreaming that’s going on in Silicon Valley these days.  That unconscious sea of inner voices out there, each whispering: “ If I’m in the right place at the right time and all the cosmic tumblers line up, maybe I can hit the jackpot, get mine and get out before the next bubble bursts.”

No surprise that we’ve heard a lot of those voices resonating loudly and clearly in the real estate market this past year.  Musing with the multiple offers.  Bouncing off the bid ups.  Rising in pitch along with list prices.

After surviving the long, tough years of the housing bust it’s good to know that the market’s back on track and there’s still plenty of irrational exuberance left to go around.

Which, in a roundabout way, brings us to where we left off last week. I had just uttered the phrase:   “How, when and why the market has stalled.” While everyone else recoiled in horror that I could even suggest such a thing.

The fact that so many people freaked-out, shows just how far the real estate market has really come. It’s only been a few short years since home values were wallowing in the lows of the late, great recession.  When we all felt displaced and oddly resigned.

I’m making the argument that the market’s recent “stall” is actually a very healthy sign.  We are right where we should be along the road to recovery.

And just to be clear – prices haven’t nose-dived, plunged or even tanked. They are just flat for the moment. Steady and holding their own.

In February 2013, the median price for single family homes in SC County was $449,000.  Then something crazy happened.  In a two-month flash, the median rose $200,000! By April 2013, it was $641,000.  Déjà Vu all over again. It felt like we had all been transported back to 2005!

Researching the history of sales in Santa Cruz County, I can’t find any other interval of time shorter than two years, where the median price made such a staggering leap.

And since April of 2013? What has the median price done?  Despite a few minor fluctuations, it has pretty much stayed the same.

I know that seems contrary to most of what we’ve heard and read about the market over the last year.  But in some ways perceptions are just catching up to what already happened.

A few months ago, March came roaring in like a lion.  It looked like we might be poised for another quantum leap.  But the urge couldn’t quite sustain itself long enough to become a surge.

I think the market just decided to take a well-earned rest.  Catch its breath after it took off and gave us enough escape velocity to get back into the black.

There’s a far more subtle organic process at work now.  A bigger picture slowly emerging out of millions of individual decisions that different buyers and sellers are making in their lives.

We’ll watch it come into better focus in the next year or two but the message is this: The real estate market went as far as it could go by leveraging lots of quantitative easing and very little inventory.  Now it’s time to build some real inventory, jobs and equilibrium for the long haul.  And that’s good for everyone.

Pushing the Reset Button

PushingResetOk. Huddle up y’all.   Gotta get busy.  Time to hitch up our big boy pants.  We’ve got a real estate market to run.

Specially here. Specially now.

Can’t shirk our responsibility any longer.  Can’t dodge our duty.  Or cop out on our commitment.  Someone’s got to do it and it might as well be us.  Realtors R Us, afterall.   And the clock is already running on 2013.

We’re done being passive.  No more whining. No more slack. No more woe is me. No more laying back, patiently waiting for something/someone else out there in the economy to grab the bull by the horns of the dilemma, take the reins, carpe that old diem and lead real estate out of the wilderness and back into the sunny promised land of milk and honey and  20% appreciation every year for the next twenty years so we can keep tapping the bottomless well of equity in our HELOCS –  and buy lots of boats and new cars and ski vacations and tons of other cool stuff… ad hoc ad infinitum ad nauseum.

Whoa. Whoa is me.  Hold on there big fella.  Let’s not get too far ahead of ourselves.  We just got past the bottom. We’re slowly climbing up.  How about if we take one small baby step at a time?  Maybe we can just be content to learn to crawl again before we try to leap over too many monster homes or juggle too many escrows at the same time or leverage our behinds to the hilt.

Back to the point…  Since the debacle of 2008, real estate has been looking outside itself for some form of magical thinking to materialize, give it a good shot in the arm, dispel all the fears and turn everything around.

Something like a giant wave of IPOs flowing over the hill – a thousand Facebooks each launching a thousand millionaires each hoisting their own sale along the sandy shores that line the Monterey Bay, ready to cash in on some surf and silicon-laden turf to stash in their newly minted asset allocation portfolios.

Didn’t quite happen did it?  Face-plant is a better description. At least to date. And not a whole lot of other new IPOs have had the courage to follow in the wake of its underwhelming performance.

Meanwhile,  back at the ranch, all this time everyone else on the planet has been waiting for real estate to wake up, step up, get the lead out and lead.  Just like it has almost always done in past recoveries.  Nothing creates jobs and gets money circulating through the economy – trickling up and trickling down – like a good old fashioned,  solid, everyday real estate market.

Real Estate in the Goldilocks Zone. Not to hot. Not to cold. Just right.  Regular people. Regular lives. Regular sellers. Regular Buyers.  What a concept!

So here we are on January 5th.   Pushing the reset button.  Ringing in the new year with a resounding refrain and resolute belief in our own resolutions.  In my head I hear the immortal words of Kevin Costner in his albeit less than immortal film – The Postman. Who among us wasn’t on the edge of their seats, practically moved to tears,  suffused with an inner call to righteous action when he intoned these inspiring words in his signature monotone: “ Stuff is getting better.  Stuff is getting better everyday.”

There you have it.  Motivational speech almost over.  I know how fired up you are. Let’s repeat the team chant/mantra one more time:  “Om Mani Gimme Sum.”   Now say it five times really fast before we break huddle, thunder through the tunnel, and burst onto that field.  We’ve got our work cut out for us.

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