I don't recall where I saw it, but I ran across a comment by a real estate agent about how prices are getting out of line... they are just crazy low. It was something to the effect of "I can't wait until these crazy prices go away and we get back to normal."
It kept picking at me
I couldn't leave it alone. That thought kept coming back into my mind. I could hear it. That thought was popping up on my computer screen while working on other stuff. I can't wait until these crazy prices go away and we get back to normal. I couldn't figure out why this was bugging me so much... it was bothering me that I couldn't let it go...
And then it came to me
The reason that I couldn't shake it was because it needed to be addressed. It was crying out for an answer.
I don't know everything...
Ask my wife. She'll be happy to tell you. But, I AM logical. I can see connections in many things. And I see the connection here. Let's start with the market cycles...
Take a look at this chart.
Right now we are between denial and depression... depending on the person and the specific market.
I think that the person with the sentiment above was in the denial stage.
Many sellers are in the "Capitulation" stage. They have given in to the "new market reality."
and that is...
The new market reality is this. This IS the market. While the deals won't be here forever, they ARE the right prices for this market.
So, this leads me to a final thought... actually a pair of thoughts...
For sellers...
History is history. We aren't going to see 2007 prices for a while. What your house WAS worth is just that. I know it isn't fun. And chances are pretty good that your agent has suffered EXACTLY the same thoughts. I know that I have seen the price erode on my own home. My wife and I bought it in 2001, and the current value may well drop below that price. We have had to kick out the ideas of selling it for 20% more than we paid... Right now, even with me in the industry, we would lose money selling it after fees...
For buyers...
Take a close look at that chart. Note that between despondency and depression lives the deal of a lifetime. In some markets we are there. In other markets, hope is emerging. In yet others, fear or panic still rein. But the difference between buying in a period of desperation and a period of optimism is the selection. There are LOTS of people buying in the market when there is optimism.
The market rises and the market falls. Property will seldom be worth $0, nor will it be worth an infinite amount of money. It obviously has to trade between those figures. And calling the bottom of the market is something that is very difficult to do until WAY after it has passed.
Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey.
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