Perspective …

I’ve been traveling a good bit lately – around town, across state lines, and internationally. And thinking about things. Real estate among them – anyone surprised by that?
 
All this has me thinking that perspective is key to understanding anything. Depending on where one is standing, things can look a certain way. Shift your position, your perspective shifts, and things look different. 
 
True about life in general, of course, but in the context of this message, true for the business of buying and selling a house.
 
Over the past 30 days, I’ve spent a week at an all-inclusive in Punta Cana, Dominican Republic, 4 days visiting friends in Palm Beach, FL, and 24 hours at a retreat on the mountain in Sewanee, TN. 
 
So, what are the perspectives that emerge …

Location, location, location
I’ve watched the residential market in Palm Beach for a decade, and there is an almost direct correlation to the market here. Simply add a zero to the end of a Nashville price, and you get the Palm Beach price. Same property, different neighborhood, and worth 10 times more. Closer to home, I have a cute house currently listed in Antioch – great for a first-time buyer or a small family. The price of the house is $340,000. In 12 South the land underneath this perfectly livable house would be worth twice that much. It’s all in where you are standing when you look.
 
Disaster
I was in Punta Cana when the ice storm hit. I talked about this, and about hurricane devastation, with my driver when I was heading back to the airport from the beach. The ice storm, was certainly a disaster for many Nashvillians. But it would have been a mere inconvenience for many Domincans, for whom a mid-range hurricane can mean losing one’s entire existence – one’s house, one’s friends, one’s whole town. Defining disaster depends on who and where you are.

Noise Level
Last weekend I was at an overnight meeting at the retreat center run by St. Mary’s Episcopal Convent in Sewanee. It’s a beautiful place way out in the middle of nowhere, perched on a bluff looking out to a long valley below. Every time I stepped out of my room onto the walkway, I was struck by the absolute absence of noise. We who live in town are so used to the background hum, that we do not hear it until it is gone. The silence on the bluff was almost a presence in and of itself. Defining a “quiet” neighborhood depends on the neighborhood. 
 
All of this brings me back to the fact that residential real estate is a very personal business.

What’s perfect for one person, would be totally out of line for another. A happily-ever-after house for one family, would be hell on Earth for another. 
 
A good realtor’s job is to understand your perspective, and guide you toward the house that will look “exactly right” to you.

Palm Trees and Ice Storms …

I spent the week of January 19-26 at an all-inclusive resort in Punta Cana, Dominican Republic, and returned to Nashville on January 27.
 
A week at a luxe resort: warm breezes, gorgeous views, immaculate landscaping, excellent service, lots of food, lots of cocktails, lots of lounging. Like being on another planet. 
 
Returning to: freezing cold, power outages, downed trees, impassable roads, and many of my fellow citizens living in cold and darkness. Not to mention a couple of clients seriously worried about the condition of their property which, because of the ice, is inaccessible at the moment. 
 
Whiplash! Disorienting, to say the least!

This reminds me, however, that certain things remain constant. On average, Americans are richer than Dominicans, but we all want the same things – food, shelter, community, recreation, a sense of purpose. We have disasters – they have hurricanes and earthquakes; we have tornados and ice storms. We all recover.

It’s life. In the Caribbean. In Middle Tennessee. Which brings me to real estate.
 
As I’ve said a number of times in this space, a house (or condo, or whatever) is a place to “do” your life. It’s a big investment for sure, but it’s so much more than that – a canvas on which to paint your personal story. Everyone everywhere wants and deserves a good place to live.
 
So, how does that play out on this freezing, ice-bound mid-winter day in Tennessee? May be hard to believe it, but this is the perfect time to buy.

At plus/minus 6%, interest rates are a whole 1% lower than they were a year ago. While they may drift somewhat lower in the year ahead, they aren’t going back to the record lows of a few years ago, and if you look at history, 6% is a pretty solid deal. Inventory was up by 13% in December – so, you have plenty of properties to look at. 
 
Shop now. Don’t wait until spring. The conventional thinking is that there will be more inventory in the spring because sellers often wait to list until spring. And sellers do that because they assume there will be more buyers in the spring. It’s a circular argument. 

Right now, there are fewer buyers to compete with, and inventory is more than adequate. Aside from slogging through sidewalk slush and soggy yards, this is the perfect time to gear up for the search and beat the rush. 

Gifts Received, Gifts Wished For

In this festive season of sipping and chatting, shopping and wrapping, giving and getting, I am always well-advised to slow it down a bit and look at all the good things life has brought me. Life itself is a gift, and when I stop and look, life is full of other gifts. 
 
That said, there’s always something more to wish for.

Gifts received …
 
My Peeps The relationships in your life are the substance that makes the rest of it make sense. I love my family and friends who support me, feed me, buy me drinks, and make me laugh. I love my clients – so many of whom appreciate my services, say please and thank you, become my friends, and earn me a good living in the process. And I love my crew at Onward Real Estate. I simply could not have landed in a better spot – great friendships, great professional support, and laughs a plenty.
 
An Arrival On March 21st, Cordell Harding Paine arrived here on the planet – son of William and Kristin, my son and daughter-in-law, and baby brother to Ruthie. Happy parents, grandparents, great aunts, and a host of cousins and friends. Joy all round!
 
Boom Town I’ve said it before, and I will say it again, we live in exciting times here in Nashville! I came here 49 years ago, to a sleepy, backward, medium-sized city without much going for it. But in recent years, we have stepped into the spotlight as a city of consequence (bachelorettes aside) and I love it! Growth and opportunity abound all around us! Another gift! 

Interest Rate Relief While 7%+ is, historically speaking, a decent mortgage rate, there has been a lot of angst among buyers (and sellers) who long for the never-to-return days of 3%. Angst also, among those priced out of the market by real estate price inflation. Down to the low 6% range, and perhaps to dip into the high 5s, mortgage rates these days are friendlier, and that’s a gift for everybody.

A few gifts I’m still waiting for …
 
A little sanity in Washington I’ll go ahead and say it: we need a break from the looney tunes stuff! Tariffs, no tariffs, maybe tariffs. Conspiracy theory of the week. Masked men in unmarked cars yanking people off the streets. Giving the finger to our closest allies. Epstein all day, every day. Enough! Let’s give ourselves a break!
 
Less hate, more love! Seriously! We, as a nation and as individuals, need to simmer down! The current level of angry rhetoric and divisiveness in this country is unsustainable. People abusing waiters and flight attendants. Politicians demonizing and name-calling anyone they disagree with. Book banning and burning. It’s at a level I’ve never seen before. We must embrace our common humanity and work together despite disagreements. Or we will lose everything. The effort begins with me. And you. So, I ask you to give it a try. I’m with you on this.

Is it time to refinance?

In this season of thanksgiving, there may be something to be grateful for that you hadn’t thought of: refinancing. 
 
Refi is something we haven’t heard much about over the past couple of years. But this year, mortgage rates have been slowly, steadily dropping, and the conversation has begun. 
 
Since January, rates have been drifting downward from a high of 7%+, and are now coming very close to 6%. That doesn’t help at all if you have a mortgage from the pandemic 3% days. But if you are locked in at an upper-6% to 7% rate, it could make a difference.
 
So, is it time to refi? As usual in this business, the answer starts with “It all depends.” 

First some background. The traditional rule of thumb has been that for a refi to make economic sense, your new rate had to be at least 1% point lower than your old rate. Refi costs money. There are charges attached to obtaining a mortgage, and your new payment had to be enough smaller than your old payment to pay you back for the up-front cost. 
 
But that calculation has shifted. The proper calculation depends on two things: your monthly savings with the new rate, and how long you plan to stay in the house. 
 
Total amounts borrowed to buy a house have grown considerably in recent years due to significant inflation of real estate values. But there has not been similar inflation of loan origination and other closing expenses. The result: a relatively smaller percentage of reduction in your big monthly payment can have the potential to pay you back for your loan origination costs within a reasonable time frame.

An example: It cost $3,500 to obtain your refi mortgage, and your payment is $290 a month less than before. Dividing the $3,500 by $290 means you will pay yourself back for the loan origination cost in 12 months. If you plan to keep the house longer than a year, you are dollars ahead. 
 
Of course, you need to look before you leap, and for once in this space, I’m not going to recommend you talk first to your full-service realtor. Talk first to your mortgage lender to help you with the calculations. And if you don’t have a lender you trust, talk to your realtor. I can help with that.
 
If you’re paying on a high-rate mortgage from even a few months ago, have a look at a refi. You might be thankful you did!

Spooky Season

Like most realtors, I’m often asked, “How’s the real estate market?” There’s never been a one-sentence answer to this question, but these days it’s harder than usual to be succinct. 
 
I usually say something like, “Interesting,” or “A little weird right now,” before launching into a longer explanation if they seem like they want more. 
 
But what is this “weirdness?” What’s causing it? Properties are still selling – but everything seems to be happening in dream-like slow motion. And the horizon is distinctly murky. I blame uncertainty. Buyers and sellers both are feeling uncertain about the future, and that’s not good for business.
 
A statistic: Beginning this January, mortgage applications have been rising month after month all year. Yet, the number of bound contracts and closings has remained static. There are lots of buyers out there, waking around with pre-approval letters in hand, who aren’t buying. It’s not an inventory problem – inventory well above last year. Apparently, people aren’t making offers. 
 
Uncertainly breeds fear, and fear breeds paralysis.
 
So, really, what do we have to fear? Actually, there are a couple of things …

Overpricing
A lot of sellers and potential sellers are still enjoying mortgage interest in the 3% - 4% range, with vivid memories of the snatch and grab market of 4+ years ago. They tend to have a “make me move” mindset, and price their properties that way. That is not going to work. The properties that sell these days are … priced to sell. The ones that sit for months without an offer are not. If the idea of waiting months for an offer – an offer that’s almost always going to be well under asking price – doesn’t scare you, go ahead and price it like it’s 2021. Otherwise, run away screaming from that temptation.

Underbidding
Conversely, there are sellers who are serious about moving things along, and price their property accordingly. Buyers, if you see something you like, and you can afford it, and the comps support the price – make a strong offer and get the deal! Someone else will get it if you don’t. So, if the temptation to lowball on a reasonably priced house strikes, treat it like that intriguing door in the haunted house. Don’t open it! 

Fear Itself
Channeling Franklin D. Roosevelt here … We have nothing to fear but fear itself. We are indeed living in unsettled times. Tariffs, no tariffs, some tariffs? Inflation, maybe? Fed rate cut, maybe … or not ... who knows … ? But curling into the fetal position and doing nothing is rarely the best approach. If you need or want to do a real estate deal, now is almost always the best time. Waiting and trying to game the market can blow up in your face – another thing to be scared of!