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July 6, 2022

Window on the World Column | The Ever-Changing Market

Real estate is not for the faint of heart. I think most of us who have been in the business for a while would agree that it takes quite a measure of grit and determination to navigate our industry for any period of time and not lose your mind. Those of us with lifer status have the battle scars to prove our survival in this ever-changing world of rates up, rates down, inventory up, then down again.

Oh, and don’t get us started about the Covid years. We are still crawling out and away from that shadow of not being able to help people buy or sell very effectively for near 2.5 years. Fortunately, now we find ourselves mostly out of the shadows again, ready to do good effective property transactions again without the business of masks and gloves, temp checks and the like.

Buyers are able to view homes in a more civilized environment without there being multi-offers over asking price before the sign is even in the ground. Pretty much, out of nowhere, we are staging the homes and sitting open houses again. The houses are sitting longer on market requiring more effort and marketing on the agents’ part. Some are getting offers accepted and then losing their courage to buy with rate increases pushing up monthly payments.

Many of us have been there, done that a few times before, but it’s a bit of a shocker when it comes around again and seemingly so swiftly. The last time we advertised price reductions was quite some time ago.

Echoes from the past might rumble in the ears of the uninformed; but this is not the same type of slow down as we experienced previously. We have not suffered with predatory lending or adjustable-rate mortgages as we did back then. For the most part, we have all enjoyed civilized fixed rate mortgages with the same monthly payment that we could count on for the life of the loan.

Gradually inventory levels are starting to creep up again with folks realizing that we are pretty much tip-top of the market, so if they are thinking of selling in the next 5-10 years, now might be a super time. But the prices — wowzer. They are up there. The affordability factor hits us right in the face. I sold one home in Greenfield with three buyers on the contract — that is the only way many people can afford a house right now.

I listed a house in Soledad, and I thought it looked familiar. I had listed the very same house in 2005 for $550K. This house just sold for $570K. So, yes, there are some crazy similarities with the market from over 15 years ago.

But then the rental market is just as dodgy. No one could evict tenants during the Covid months and rents have climbed to sillyville the last few years. If you have the capacity to buy, why on earth would you not want to do that and, at least, build something for your family and take advantage of some tax incentives? It’s very hard to qualify for these prices at the moment with the rates as they are. It’s a Catch 22 of the highest order.

I went to the grocery store the other day — that is not my usual household chore. I could not believe the prices on regular items. Everything is higher at the moment — not just gas and houses and it’s honestly the world over — not just a U.S. problem! But we’ve seen that before too and markets are always subject to change. In time, loan programs will appear that will help people with their qualifications, house prices will slip the way they climbed and local professionals will continue to help the buying and selling public navigate what is sometimes a challenging, if exciting, endeavor.

I no longer get excited or upset about fluctuations in the real estate market or the gas dollars it takes to fill my car. We do what we can to make each day as successful and enjoyable as possible; that is all we can do. I am happy that we planted a garden at the house this year and will be supplying our own fruits and veggies for the most part. That is a very satisfying answer to inflationary prices. Buy carefully, avoid packaged and junk foods; move smartly through your daily world. I don’t think that re-set is a bad thing — like we have a choice!

I also have to share a happy tale that made my heart sing this week. A friend calls to tell me she is trying to catch two dogs on a ranch off Camphora. I post on Facebook to see if anyone is missing their pups. My friend later calls back to tell me that everyone stopped on the freeway to help catch the pups and the rescue and homing was successful. I love stories like that. Makes me stop fussing about sitting an open house or staging a home. That stuff just sharpens our tools and makes us better at what we do.

It’s going to be an interesting roller-coaster ride in the real estate world this year — as if it’s ever not — and I do think we are going to be seeing some improvements in affordability for the buying public. If Cali real estate is too much for your pocketbook, there are many other more affordable States out there! Don’t forget that option in life. We can also help connect you with reputable agents in other areas.

In the meantime, it’s Memorial Weekend and I shall be hosting an open house. My second on this particular home, that has already been in contract once before. Wish us luck. We are working hard. It’s that time again in our industry.

Lucy Jensen
Soledad Columnist
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