Three weeks ago, the SFHomeBlog trumpeted the “best week of 2006 for buyers” as new inventory hit the market. Three weeks later, and as new listings have continued to outpace sales, the HomeBlog now characterizes the market as a “veritable collection of crap.”
(Strange considering that two-thirds of the current inventory has been on the market since that “best week” statement.)
We suggest it might be healthier for all concerned to acknowledge that it’s possible that prices have started to slip, rather than simply blaming “stubborn” sellers. And as usual, if in fact the sellers are the problem, we can’t help but wonder how they might have ended up with such unrealistic expectations in the first place.
∙ Some Facts, Some Fiction [SocketSite]
∙ A veritable collection of crap [SFHomeBlog]
∙ From Gain To Loss In Just Three Short Months? [SocketSite]
THANK YOU SocketSite for putting forth that notion. You may lose a few readers for promoting the idea (because everyone knows that if prices are falling, it’s all the media’s fault and has nothing to do with fundamentals like incomes vs. prices). But at least the realities of the market are reflected.
Matt’s a good realtor, and he’s right in his post that now is the best time for buyers in a long time. He fails to make the observation that if the current trends keep up that it might be a much better time to buy in 12 to 18 months. Can’t blame the guy for cheering his own business; but he has to expect some contrarian viewpoints as well!
If he can’t – or is unwilling to – discuss such a possibility based on current trends, why does that make him a good realtor as opposed to just another in the “now is a great time to buy” throng?
I pity those of you who constantly wring your hands (and your brains) trying mightily to “time the market”. If you really want to “day trade” you’re in the wrong marketplace. Ultimately, over the long term (and we’re only talking a term of several years, not a lifetime), a home purchase is always a good investment with a solid return. And remember, you’re buying a HOME, not pork belly futures. Let’s keep it real people.
Agreed with Indulge. It’s that day trading mentality which has pushed prices out of the reach of most genuine buyers. By genuine buyers I’m referring to people who want to buy something to live in, and not flip in 2 weeks for a 450% profit. For the record, most of us aren’t wringing anything – we’re just priced out of the market in general and would buy if we could do it and still afford to eat.
Indulge – we do not advocate “timing the market,” but we firmly believe in understanding the market (the good, the bad, and the ugly) and making informed “investment” decisions. And to be quite honest, “real estate always goes up” really isn’t the kind of sound advice, insight, or analysis that we’re going to rely on when purchasing a house in today’s market. And that’s doubly true if you think we should be considering it as an investment rather than simply a place to call home.
Over the long run real estate goes up, as does the stock market. And just like individual stocks, some properties provide fantastic returns, while others end up eating the lucky homeowner alive. It’s a matter of doing your homework, understanding the market, and purchasing accordingly.
Call us old fashioned, but we still believe in the age-old real estate investing maxim: you make money when you buy, not when you sell. Not to mention that buying a condo one week only to see the developer reduces prices by $100,000 the next is a bitter pill to swallow, regardless of your investment horizon.
Now back to the topic at hand: how is it that three weeks ago it was “the best week in 2006,” and yet today it’s “a veritable collection of crap?”
It’s easy to spot the realtor’s posting on this board; and I simply don’t believe the argument that you buy a home to live in and not to invest in. This is a realtor argument trying to skew reality. Any purchase decision is an investment whether its a pack of gum or a college education. A home purchase is a big investment and should be made carefully like anything else. Anyone who says different is a …… realtor. 🙂
AC, his unwillingness to discuss market risks doesn’t make him a good realtor, but it also doesn’t make him a bad realtor either. I said he is a good realtor because I’ve walked several of his listings, talked to him personally, and observed his marketing and selling strategies. He’s pretty good at selling a house; and he’s active in the SF RE community at large (i.e., good network). I also like his blog. I have no experience with him as a buyers agent. I was working with my own agent at the time.
Back on point, Matt’s comments are interesting to track, and the posting history is one of the great things about the blogsphere. Socketsite noted earlier that Matt did have a posting last year at about this same time of the year noting the similar market conditions; with similar predictions. He is even quoted as stating this event was a “one time occurance”. So much for that theory, but in his defence, the market did return to a “normal” competitive SF marketplace. So his perspective is at least validated in one market swing. I think Matt and all other anti-bubbleists will have a different perspective in a few more months.
I have been on the other side of a transaction with Matt and I have to say it was intimidating how vehimately he protects his clients interests. I was left with nothing but to be impressed, even though it was taxing at the time.
There are far too many ‘absent agents’ that are not actively managing a transaction once they put a person into contract and even less that truly understand how very technical this business is, until they get sued.
That being said I actively read both blogs and regularly send my clients to them because I think both are exceptionally interesting; and I love a good debate. I’d rather have my clients hear both sides so they can make up their own minds.
> S.S. The godzilla photoshop entry made my weekend too.
Eddy, in terms of the bubble debate – many of us agents think the market it going to correct more into next year as well, and I for one tell my clients that is an active possibility as well as to anticipate much more modest appreciation on their investments moving forward – but I also think there are some things that are worth making offers on now and the truth is it could also go the other way. I never would have guessed the market was going to appreciate the way it has over the past 10 years or I would have sold a kidney to buy more real estate and retire.
And to put my money where my mouth is I just wrote an offer for my father on a condo in S.Beach, his first new home purchase in 30 years, and even though this property could be worth $50k less a year from now, he plans on holding it for 10 years and this particular unit which which is perfect for him, will almost certainly not be available this time next year.