The doomers living in mom’s basement want you to believe that the sky is falling.
They’ve never owned a house before, let alone sell real estate for years. Yet, their voice is loud enough that they are winning the battle of opinions about where the market is going – mostly because the entire realtor industry is just standing quietly on the sidelines, instead of providing guidance.
There is one simple correction underway.
The gap is back!
The difference between the fixers and the creampuffs is back, and it is growing, thankfully. The homes that aren’t spruced up are getting hammered on price. It’s probably not that obvious yet because they are the listings that are just lying around not selling. But once they have been on the market for 2-3 months, they are going to get lowballed – and by then, there isn’t much the seller or listing agent can do.
Take your pick. Sell early, or sell low.
The doomers are living in your head now. They don’t take the time to dive deep into the results, or look at an open house. They just group all sales into the same bucket, check the median sales price or the Case-Shiller Index, and declare bloodbath because those too-simple measurements are down a couple of ticks.
It causes buyers to wait for the creampuffs, and ignore the fixers – or lowball them.
I made this observation in the original Coffee Bet in 2006. It was more dramatic and easier to spot back then because the banks didn’t have a problem giving away the dumps, and the downdraft was swift and certain. But these days, the sellers – all loaded with equity – are much more likely to hold out. They saw fixers selling for ridiculous prices during the frenzy, and want to believe that will still happen. But it’s the only change we need to throw the market into tumult, because nobody points out the gap.
Expect that there will be few superior properties for sale, and they’ll sell for a premium. And the rest won’t.
It would be nice if local realtors would adopt this sentiment, and publicize it.
Or at least say something about this:
Get Good Help!
Who gave you permission to feature the Dawghaus? 😉
That bet 17(!) years ago was a close thing however. This time you are correct that the market will bifurcate twixt excellent properties and not.
17 years ago – yikes! How many of the current realtors were selling then?
I love the comments in that post too. Schahrzad predicting 80,000 listings! Today there are 2,917 listings of all property types in the county.
Many buyers are angry for being laughed at by crazy people who would pay anything for a property.
They are double angry because those same properties continued going up in “value” making the crazy people look like financial geniuses.
Tables have turned + there’s going to be some favors to return.
We’ll see. I don’t think we’ve run out of crazy people yet.
I’m sure lots of folks are waiting for some rallies to sell off more crypto and tech stocks and then take the cash to buy hard assets. Dead cat bounce? That and waiting for the Fed pivot!
Here is the deal. San Diego has the “sunshine “premium” as a whole, the Bay area refugee’s supporting baseline pricing. Add in the 5% “cream puffs’ with excellent location and condition, single story, and the pricing becomes tiered another 20% for that dream home.
The wild card is if the Big Biotech and professional services industries get crushed by the fed, stock prices collapse, and the defined pension people keep moving out to avoid California taxes and infrastructure issues, crime, and other societal breakdowns. The super wealthy can always keep a 2nd home in San Diego, but the middle to upper class will take a beating., and San Diego will become a bellwether for the “wealth divide”
And the so-called baby boomer wealth transfer will not save the basement dwellers, or others who do not have marketable skills. Property taxes and insurance and maintenance will eat into the inheritance windfall quickly.
We are about to enter the age of structurally impaired markets.
Those are probably all true but the market/pricing is going to be determined by the inventory.
In some areas there will be a decent flow, and others will feel like the Mohave desert. And everything in between.
Buy a house and liven in it 10+ years. San Diego real estate has never failed to make a new high.