I’ve been remiss in posting this week; that “job thing” sometimes get in the way. In the course of my week, I had the opportunity to meet with a gentleman considering selling his home who happens to be a writer. He was generous enough to loan me his book, Why Business People Speak Like Idiots, and I found so many parallels to our business that it inspired me to mention it here.
In short, the book addresses the idiocy that is our corporate “speak” and how it affects our ability to effectively communicate. Fortunately, we tend to blog as we speak, so I remain hopeful that we haven’t fallen into that trap here, as we impart our industry-driven observations on the plethora of market-driven fluxuations and influences drawn from the internet’s vast knowledge base to provide clarity rather than exacerbate the consumers inability to respond to the paradigm shifts involving disintermediation, value-added agency and…
You see what I mean? What really rang true for me was his discussion on why we do this dance. We do it for pride, ego, and evasiveness to name a few. I would like to focus on the evasiveness issue here. In real estate, we have a very difficult time cutting through the crap and delivering the bad news. Maybe it is the sense that self-preservation at times requires a rose-colored-glasses approach. Other times, I suspect, it is more a desire to be liked. I have been in countless situations where I had to make the painful decision of speaking from the heart and losing the client versus telling them what they want to hear and getting the job. Afterall, if they don’t like my message, another agent is undoubtedly waiting in the wings to give the jargon-filled positive spin. My conclusion, often to the detriment of my business, is that the honest approach is the best, and the only approach that allows me to sleep nights.
In that spirit, I am going to share some honest observations and opinions on our San Diego real estate market, no sugar-coating, just straight-speak.
- We are in a correcting market? We are in a declining market. We have enjoyed more than half a decade of feverish buying and selling, and an unprecedented rate of appreciation. Real estate markets, like the stock market, are cyclical. Ours is now a down cycle. How long will it last? No one knows, of course, because we can not predict the future. If history is any indication, it will be years before our current cycle shifts and prices begin measurably increasing.
- Homes just aren’t selling? Homes continue to sell, but they need to be properly priced and prepared for sale. Competition is fierce (more listings, a lot of seller anxiety). Gone for now are the days when you can offer your home at a price higher than the last comparable sale. Expect to get less. However, the properly priced homes sell and sell relatively quickly, even in this market. What do I mean by quickly? Not hours, but certainly not six months.
- There aren’t any buyers out there? There are plenty of buyers out there. They are waiting and watching, and they are making offers when they perceive the home as fairly priced. One of our open houses last weekend resulted in ten visitors through, a healthy number. Each one was seriously looking to purchase.
- Interest rates are going up? Eventually, most agree that interest rates will rise. For the time being, however, rates remain low (in fact, have recently come down), and this is favorable to the buyer.
- Prices are going to drop further? Perhaps, but the expectation is that this will happen in concert with, or even because of, rising interest rates. For the seller, it is all about price. For the buyer, it is all about “cost”, and both price and interest rates factor into the cost. Unless you are Nostradamus or viewing real estate as strictly investment, do not try to perfectly time the market. Which brings me to…
- When is a House a Home? I tend to think of a House as an object, a commodity. A Home, on the other hand, is a place of personal refuge, a necessity, a domestic setting. A house is impersonal, a home is very personal. If you are buying or selling for pure monetary gain (get ready for this), it may not be the best time. If, however, you are buying or selling for personal reasons, including enjoyment, life-style or even out of necessity, that is an altogether different story. Sellers, be realistic about pricing and timing. If you are, your home will sell. Buyers, find that House that you can call Home.