Snapshots from the Road - again

Verbose by nature, I frequently struggle to keep these messages down to about 400 words in the certain knowledge that if I overwrite them, no one will read them.

But sometimes I just don’t have 400 words to offer. That said, I’m neverwithout observations. So here are a few quick ones – snapshots from the road as we all travel this crazy market together.

Location, Location, Location
These days some buyers are finding themselves priced out of neighborhoods they want to live in. But, if a specific neighborhood isn’t absolutely critical, it pays to look for the same house in a different area. Looking at recent listings and sales (some of which have been my own) I find that a comparable 1500 sf, 1960s ranch can be up to 15% less expensive in Charlotte Park or Bellevue than in Crieve Hall. All three areas are nice and well located – but you get more house for your money in Charlotte Park or Bellevue than in Crieve Hall.

Looking for a plus-sized ranch or a mid-century modern on a big lot? Forget about Green Hills and check out Bordeaux or Madison. Looking for a new or new-ish tall-skinny? Try Charlotte Park instead of the Nations.

Take a Breather
I’m a crossword addict. I work the Sunday New York Times and LA Times puzzles every week, and always have a spare on hand if I finish early. But sometimes I get stuck. When that happens I put the puzzle down – usually overnight – and when I get back to it, the answers just seem to glide into place. Same thing with real estate shopping. It gets stressy making offer after offer and getting turned down! If that happens, it’s best to chill out for a week, or two, and then go back to it. It’s amazing what seems to magically turn up after a little down time.

Highest and Best – not always synonymous
This applies to buyers and sellers both. More dollars doesn’t always mean a better offer. Recently, I’ve advised seller clients to reject offers that were appraisal-contingent but were so high, there was no chance the house would appraise. I’ve gotten deals for buyers at fewer dollars than the competition because I read the listing remarks or called the listing agent for info, and then wrote an offer that included things the sellers wanted. Best beats highest every time!

And here we are. The words above clock-in at 397. Time to quit and have a cocktail!

Snapshots from the road

I’ve never seen anything like the residential market we are in right now. And I know people who’ve been in the business 40 years or more who say the same thing. 
 
We are barreling along at 90 mph on an unfamiliar road, and that can make it hard to understand what’s going on. The scenery is certainly interesting, but it goes by in a blur. Knowing what it all means can be a challenge.
 
That said, there are clues to the meanings if you look. I’ll stick my neck out and offer a few thoughts …

Are we in a bubble?
I think not. Prices will keep going up. I hope the rate of rise will taper off a bit as inventory begins to catch up with demand (new home starts are at their highest annual level in 15 years) but, barring some sort of global melt down, they aren’t going to collapse.

Is now a good time to buy?
Yes. Want a more expensive house? Wait a week and come back. If you want and/or need a house, now is always the right time to buy one. No one can predict the future and this is about more than investment. It’s about a place to live your life.

Is this a difficult time to buy?
Yes. It’s harder than it has been in a long time. Because inventory is so low, there’s a battle for almost every house that gets listed – as long as it’s sensibly priced. (See below about limits.) This battle is going on at all price levels – from starter homes to million-dollar+ listings. But patience and persistence will pay off. Brace yourself and jump on the roller coaster.

Think about buying new construction
New-builds are frequently listed before they are finished. In some cases you can avoid the bidding war stampede and associated brain damage by buying this way. You may have to wait a bit, but the process will be calmer.

Is this a good time to sell?
Duh!

Is there a limit to all this?
Yes. There is a limit. Overpriced houses do not sell. I’ve seen it time and again. Comps still matter. Appraisals still matter. And all those people coming here from California and New York work with realtors who look at the comps and think about appraisals.

Work with your realtor
No matter how weird it gets, your friendly, knowledgeable, indefatigable realtor will be there with encouragement and counsel.

Bonkers, yes. Stupid, no.

Everybody’s talking about it. The real estate market has lost its mind. 
 
Well, maybe.
 
True facts: Inventory remains tight, demand remains high, and buyers are bidding up the price of houses. Multiple-offer bidding wars break out with alarming frequency. Week-before-last I got a bound offer at $51,000 over asking price, with an escalation clause on top of that, and no appraisal contingency … in nine hours! 
 
Not-so-true facts: We are in a hot air balloon, drifting farther and farther from earth, we are going to crash, and we are all going to die.
 
This market feels unprecedented – not to mention a little bit scary. And perhaps it is. But reality eventually imposes limits.

While bidding wars seem the norm these days, and sellers are on high alert for that (mythical) buyer from California or New York who will throw big bags of money at anything, overpriced houses DO NOT SELL. 

Count on this!

Because things are so wild right now, we might need to define “overpriced” before going further. In my world, things are worth exactly what people will pay for them – no more, no less. What a buyer is willing to pay for a house today is what it is worth – to that buyer on that day. So what do we mean by “overpriced?” 

Overpriced houses are the ones that don’t sell. 

Do those even exist these days? You bet they do! This past fall I had an overpriced listing (seller’s choice on the asking price) and we had 77 showings in three weeks without a single offer. The seller agreed to drop the price to where it should have been all along, and we had two offers within 24 hours, both above the new asking price.

When a seller asks the market for a certain price, the market responds. Sometimes it responds with a bidding war. Sometimes with total silence. 

So, how do we apply this to buying and selling? And maintaining one’s sanity?  

For sellers: Don’t get greedy. Look at the comps, ask a good price, and accept the results. And be aware that the highest offer may not be the best offer. If it’s too high to appraise, everybody – including you – will likely get cranky in a big hurry!

For buyers: KNOW YOUR LIMITS! Focused searching, fast action, and aggressive offers are the name of the game, but know when to stop. Don’t let the excitement of the auction atmosphere lead you to an offer that will give you a hangover in the morning.

And – I believe I’ve said this before – let your realtor guide you to the best deal.

Lessons from the Lockdown

Compared to how terrible the pandemic has been for so many, I’ve been lucky. I’ve avoided getting sick, and I have a great job that keeps me busy, well-fed, and out of the house.

It hasn’t exactly been a picnic. Beyond an occasional elbow-bump, I haven’t touched another human being since last March. I miss seeing my friends and family, and I actively detest and dread Zoom meetings.

On balance, though, I’ve gotten along pretty well.

Then came the recent ice/snow/snow storm. As I write this, my car is stuck in the garage for the fourth day because I can’t get up the drive to the street. Suddenly, at this late date, I have a window into the world of Covid lockdown – something I knew about, but didn’t really know.

Here I sit, with nowhere to go and no way to get there, and I totally get why people have been focused on their homes. There’s nothing else to look at! Sales of household goods, furniture, window treatments, and home improvement supplies are booming.

According to numerous news reports, post pandemic, many folks will never return to the office as before. Even fully employed, many of us will be “stuck” at home on a permanent basis.

What does this mean for the concept of “home” now and post-pandemic?

It’s time to get it right. If you’re going to be there all day, every day, now’s the time to make it what you want it to be.

Need an office? I happen to have a great purpose-built office in my 1962 ranch – a rare thing in a ranch, and very welcome. But not typical. If you don’t have a spare bedroom to use, maybe it’s time to add one. Or upsize.

Need to stash the kids while you squeeze in one more late-afternoon Zoom meeting? Maybe it’s time to finish that basement. Or maybe it’s time to buy one.

Sick of looking at your existing ______ (fill in the blank here: kitchen, bathroom, picture window, deck that needs re-staining, cracked driveway …) Maybe it’s time to do some upgrades. Maybe it’s time to start over.

Do you just need more elbow room? Does the house feel cramped these days with everybodyat home all the time.Maybe it’s time to add a room or a whole wing. Or, maybe it’s time to upsize.

As usual in life, there’s good news and bad news.

Good: Interest rates are still low. You can buy more house. Bad: Inventory is tight. It's tough to get the right house. Good: Inventory is tight. Your house will sell if you want to buy another one. Good: If you upgrade or add-on, you can avoid all the buy/sell hassle. Bad: If you upgrade or add-on, you’ll go though remodeling hassle (often quite severe!) assuming you can find someone to do the work (good luck with that!).

Good: A smart realtor can help you sort out these conflicting factors and decide on the right path – even if it’s an upgrade rather than a sale.

No time like the present

Life is short. 
 
As the years roll by, this becomes more apparent to me every day. Where did all the time go? And how did it all happen so fast?
 
As we pull slowly out of the pandemic and begin to recover, I see evidence of life’s brevity all around me. In December, a cousin died of Covid – just one of 420,000 and counting. Last week, I got news of the unexpected, premature death of a former client. As I write this, I know three people of varying ages who are battling cancer – with mixed expectations. 
 
Why all this gloom? Especially in an email about real estate, not to mention cocktails!
 
Because, “now” is the only thing we have. The past is gone and the future, aside from being impossible to predict, isn’t here yet. That, like so much in life, has implications for how we look at residential real estate. 
 
If you’re wondering about the “best” time to bust a real estate move, I have an answer: the time is now.

Last March, at the onset of the pandemic, three buyers I was working with were certain everything would be much cheaper in the summer. As it turned out prices continued to rise. One got back into the market and bought in the summer – at considerably more than originally anticipated. Another is back in the market, but hasn’t found anything yet. And the third disappeared. Haven’t heard a peep since March.
 
Waiting to make your move based on predicting the future? It’s a crap shoot at best. 
 
As for the past, well, regrets are a gigantic waste of time.
 
Did you miss a great deal? Suck it up and move ahead. There’s another deal out there. Did you overprice your house and wait six weeks – or six months – for a buyer? Drop the price, get the sale, and smile as you count your proceeds. Regrets over the past only make the present less pleasant.
 
Some things about NOW

Money is cheap. It may be more expensive later. It may not. But right now, it’s cheap, and cheap money means buying power.

Inventory is tight. Things may loosen up in the future. But they may not. If you need a house, start looking now. It could take a while to get a deal.

Buyers are plentiful and clamoring for property. Thinking about waiting until the spring to list your house because there will be more buyers looking? In this market that concept is completely defunct. Do you want to sell? Do it now.

The big point is this: in residential real estate, where investment value is really secondary to the value of having a roof over your head, the present is always the best time to act. If you are ready, willing, and able to buy a house, buy one. If you’ve stumbled a time or two (and who hasn’t?) drop it and move on.