Things are getting better. Every day in every way? No, that might be stretching the bounds of recent good fortune a bit too far. And God Knows, we’ve sworn off anything that even remotely smacks of exaggeration or irrational exuberance for at least another seven years.
Nope. We’re not going to go down that road anytime soon. But things are getting better nevertheless. Whether we don’t like it or not.
Even if there are tons of buyers out there clenching their jaws. Gritting their teeth. Grinding their back molars in frustration. Muttering under their breaths. Sending tortured thought bubbles up into the stratosphere. Issuing silent screams to a seemingly distant God and an utterly mystifying marketplace that just doesn’t seem to care that they are back. And now…finally…..want to buy.
Yep. Things are busier. But not nearly as busy as the growing ranks of would-be buyers busy railing about the supreme injustice of a market that should theoretically be welcoming them with open arms. And open doors and windows of sublime opportunity. Rather than punishing them with what feels like some kind of passive-aggressive withholding behavior. A depressing no-show act that’s keeping anything decent off the market. Out of sight and out of reach.
If you are an eager first time buyer or just a regular “organic” buyer that can fog a mirror, generate a pulse and easily qualify for a home loan and a purchase somewhere in the vicinity of the mid level price range of – $500k to $750k – you’ve probably experienced humbling events and suffered some gross indignities over the last six months. As infinitely patient as you’ve been, no matter how many times a day you check your property search engine, so far through the first three weeks of 2013 – nothing much seems to have radically changed the status quo of buyers’ woe.
– The number of bank owned properties coming on the MLS has diminished. Fewer choices.
– The number of short sale listings has diminished – and those that are coming on as short sales seem to be carrying some particularly ugly baggage with them. Fewer choices.
– The foreclosure flip market is drying up. Less investor cash types plucking tarnished gems off courthouse steps, doing quickie makeovers and offering them back up to other folks who would rather not do the work themselves. Fewer choices.
– The sad fact that many mid-range properties languishing on the market for more than a few months are simply too painful to look at or are irreparably tarnished by unfixable inspection issues, clouds on title or completely dysfunctional sellers. Fewer choices.
– The sad fact that a high percentage of properties coming on new are located in suspect neighborhoods or on busy streets or have steep slopes or no sun or have just way too much deferred maintenance. Fewer choices.
The sad fact that the few relatively good properties coming on in good locations with a little soul and a bit of curb appeal and nice lots – are being besieged by multiple offers. Many of them tendered by all-cash buyers that other well-qualified people simply can’t compete with. Fewer choices.
More than 23 years in real estate and I can honestly say that I’ve never seen a market with fewer choices. So many Buyers that want to buy but such a painfully slow and tortuous drip of homes coming on – one or two at a time.
Back in the early 90’s there were times when 1500 single family homes were for sale. All addressed up. Ready to go. But you could shoot a cannon down any street with five or six for sale signs on it and not hit a buyer. They weren’t just scarce. They were all but non-existent.
These days any random cannon shot down any decent street is likely to nail a dozen buyers like bowling pins. But it’s not just here – Stockton – the foreclosure capital of America – has a shortage of homes for sale. Las Vegas itself – the ultimate fool’s paradise of boom and bust – has less than a five weeks supply of homes available.
Next week we’ll discuss the reasons.
Wouldn’t it be nice if we could channel a little more of that sentiment (and mojo) into the real estate inventory these days. Seems like no matter how many times a day you and I and I go onto the MLS to check for new listings or download search engine e mails…nothing much new “of value” comes on. Just the same old same old.
Tired inventory. Picked-over inventory. Stale-inventory. A warmed-over re-hash of all the stuff that didn’t sell last year. Including a strange menagerie of distress properties. Dubious short sales you can never be sure of and a smattering of REOs banks are pinching out of their systems…starting with the worst first.
The sum total? An uninspiring catalogue of places. Most of which aren’t qualified enough to move anyone anywhere. As in: Move buyers in. And move sellers out.
(Quick disclaimer: Individual Sellers, don’t get bent out of shape here. I’m talking about everyone else’s listing except yours.)
I guess we could say it’s All Filler…Very Little Killer in real estate land right now. Not many killer views, killer yards, killer locations. Or to lower our epxectations just a little… not many plain old, modest, middle of the road killer houses packaged up in nice presentations at reasonable price points. Specially right there in the sweet spot between $600k and $800k. I don’t know about you…but it’s killin’ me.
Most Agents understand. They’ve got clients calling too. Buyers ready to buy. Or who think they are. Buyers becoming increasingly frustrated with a market that doesn’t seem to offer anything up that fits their needs or price range. And by extension, Buyers frustrated with their own Agents, who become more suspect each week when they fail to turn over enough rocks or the “right” rocks to uncover that special hidden gem waiting out there. Somewhere.
The same Buyers who don’t understand why it is so hard to buy in (what keeps getting sledge-hammered into our heads as) the Perfect Buyers Market. Is it safe to say this isn’t a Perfect Buyers Market?
There are certainly incredible interest rates. Prices have certainly come down a long way. Those are two of the defining characteristics of a Buyers Market. What’s missing? Great places that people actually want to buy. I think some people call it supply. Or maybe “effective supply” would be a better term.
I keep having the same deja-vu experience. Clients who’ve been looking forever, pouring over the on-line pictures of homes for sale, who keep calling and asking to see places they forgot they already saw a year ago. Houses that didn’t work then and aren’t going to work after another 365 days on market and a minimal price change. I call this “Deja Viewing”. Stare at the MLS long enough and homes start repeating themselves over and over.
So when’s this slow tortuous drip of new properties coming on going to end? When do the floodgates open? I feel like a kid staring at the classroom clock. Waiting for recess from a hard lesson. The minute hand isn’t moving. The fabric of time is frozen.
Thursday was Groundhog Day and another shadow appeared again this year. Was it just the shadow of a huge shadow inventory? Or was it also the shadowy logic of would-be sellers planning to hold out putting their places on the market for as long as they can.
Either way, looks like the winter of our buyers’ discontent is going to last at least another six weeks. If we don’t shoot ourselves in the foot that is – by kicking the groundhog down the road even further…
Our regular ration of news about the state of the market is due out any day now. A smattering of real estate-related stories will start popping up in the public domain presently. It’s the little flurry of activity that always accompanies the release of the previous month’s sales data.
Don’t blink, because the half-life of these stories only quickens the pulse and fogs the mirror for a day or two. And don’t hold your breath either, thinking that the UPI guy is going to be delivering any big gift-wrapped packages to your front door. As we wander further ahead into the Ho Ho-Ho season we are going to find ourselves sinking further into the Ho-Hum season as far as real estate is concerned.
Status quo seems to be the current quid pro quo. Stories sounding more like non-stories will be rearing their nondescript headlines in the daily press. Dressed in bold font. Spun this way or that to foster an air of enlightened importance. But in the end, there won’t be a whole lot of new news fit to print. Certainly not much news to use in any meaningful way for anyone trying to determine their own individual path forward through life.
Maybe there’s some brilliant phrenologist out there with the ability to get a good “reading” from those upcoming headlines when they appear. Tickle some kind of intuitive sense or future perfect tense out of them. As for the rest of us? I’m guessing most Agents and Buyers and Sellers are going to remain hovering in the dark for quite awhile longer.
Yep, the jury is still out even as the results are trickling in. Just as inconclusive as they’ve been. And had been before that. The median price is still lodged in soft tissues of the marketplace – between $500k and $550k. The number of sales has ratcheted down a little but not by a significant amount considering the small local sample – 140 to 119 year over year. The average price is still residing in the familiar confines of the same ballpark -$572k – one that simply isn’t allowing many home runs. The ubiquitous Unsold Inventory Index is holding steady in the 6-8 month range, the suggestion being that prices, for the moment, remain “stable” – if not completely and utterly uninspiring to principals on both ends of the average real estate transaction.
Is the lack of news the real news?
Here we are. Sitting on the edge of our musical chairs. Primed with anticipation after a whole year of kicking the can down the road. Wondering whether the other shoe is going to drop from the high wire balancing act of the economy. Or alternately wondering what miraculous confluence of factors is going to step up to give us a swift kick in the pants. Boot and reboot us forward.
With Thanksgiving and Christmas on tap, we’ve got the perfect excuse to explain why people and properties aren’t moving faster. Faster better. Or faster worse. For another month or so, we can simply say that we aren’t really holding our breaths., we are all just taking a breather. Buyers are on temporary hiatus. Sellers are on sabbatical. Agents are on vacation. The market has given itself a voluntary furlough.
There’s no way around it so we might as well use this time wisely. Take a few extra weeks to drop back twenty yards and survey the horizon ahead. Ponder the landscape before we decide whether we have to punt or not in the new year.
We’ve thrown a lot of life preservers to real estate this past year just to keep it floating in the same place. Incredible interest rates. Tax credits. Buyer incentives of all shapes and sizes.
What’s going to determine whether we sink, swim or continue to tread water this year? That’s easy. The big three: 1) Jobs. 2) The continuing machinations of the credit crunch. And…3) The disposition of the ominous shadow inventory that has grown to archetypal proportions in the realm of the collective unconscious.