"Hey, you look exactly the same," my friend e-mailed me, after receiving last week's Perspective for the first time (thank you Photoshop). Ronna and I met in San Francisco when our kids were in preschool together at Temple Emanuel and at the risk of giving away my age, that was nearly 20 years ago. So while I wish I still looked "exactly" the same, I'm not even close.
I was once again reminded of that fact after getting talked into Boot Camp by my good friend Karen, the work-out queen. Not only does she hit the gym daily, she plays competitive tennis, swims in a masters' program, and power walks the steep hills of Piedmont, so she's not just fit, she's SUPER-FIT!
Me? I'm pseudo-fit. I put up a good front, but it's all smoke and mirrors (and creative draping). After two weeks of working out, I'm definitely feeling the burn from those relentless squats (Ugh!) and I'm discovering muscles I haven't used in quite some time. Did I mention that I'm getting up at 5:30 IN THE MORNING! (that's a.m.) to put myself through this torture (say what)? For a girl who used to teach aerobics, dance professionally, and perform aerial acrobatics in the circus, it's humbling to say the least. Let's face it, only children look forward to aging. (My teenage driver-in-training can't wait to turn 16!)
Of course, this got me to thinking about the muscles we use with respect to Real Estate, which is to say that buying or selling a home isn't something one typically does every day, every month, or even every year. Unless you are a professional "flipper," are being relocated on a regular basis, or are unlucky in love (sadly, divorce is a key driver in real estate sales) the reality is that, on average, Buyers and Sellers will likely enter the California marketplace only once every 5-7 seven years.
What about the rest of you?
Many of you will live in your homes for 20 years or more as you transition through the parenting stage before seeking a "buy-down" residence, OR a change in lifestyle, OR new geography altogether. A handful of you, will stay on indefinitely in the homes you bought early on or inherit the one you grew up in from your parents (lucky you). With lengthy time gaps in-between these MAJOR transactions, is it any wonder your muscles have atrophied? And just like me, who's returning to exercise after a way too-long hiatus, it can be hard to keep up. (It can even hurt!) In other words, your muscles aren't necessarily in shape when trading real estate; they are simply no longer toned. So, one of the things I often need to do when I take on new clients, is to work on your fitness with respect to the market and where it currently stands. In essence, I quickly become your personal trainer, "Drop and do 20!"
Okay, forget the push-ups, but I will send you to Sunday Opens, I'll encourage you to get pre-approved for a loan, and I'll pull comps for your review as I work to bring you up-to-speed. I will force you to read the disclosures (all of them), I'll debate with you vigorously, I'll undoubtedly challenge your thinking, and occasionally, I will disagree with your conclusions (it makes us both healthier). I know that the faster you shape up with respect to what is real and what is imagined, the better off you will be and the better your results. (BTW, it isn't necessarily any easier on my end, people don't like giving up their illusions.)
Last Week, The GRUBB Co. invited it's own trainer to our weekly Tuesday morning meeting, Carole Rodini. Ms. Rodini is a no-nonsense, shoot-from-the-hip, take-no-prisoners, highly-respected, top-notch economist and an expert in the field of Real Estate (in other words, she's my kinda gal) and best of all, she's incredibly straight-forward.
Carole lectured for nearly an hour without pause (I'm not kidding, this women barely stopped to breathe) and enlightened us all. I've had the privilege of "working out" with Carole before, but she never fails to exercise the brain as she shared her observations about Real Estate, the economy, politics, world views, our local market, and the future for them all. (Whew! I can only hope that I'm as relevant at 68.)
I can't begin to pass along ALL of Carole's pearls of wisdom in the limited space here, but I will say that she predicted that both the market and the interest rates will tick up measurably this year. (Interest rates can't really get any lower - the prime is nearly at zero.) In fact, home prices are already rapidly rising, as any Buyer who has actively been in the Spring Market can attest to.
For those of us on the service end of things,it feels dramatically different than last year's much slower paced market (it's literally turned on a dime!). Interest rates will undoubtedly rise more slowly than will home prices, but they aren't expected to go down any longer and the fees associated with them will definitely go UP! So if you are waiting for values to continue to soften, unfortunately, you have already missed the mark (at least here in Piedmont).
Every Buyer I helped purchase a home last year, did extremely well and is now in good position for what lies ahead. While I'd like to personally take the credit for their good fortune, the truth is that they were lucky enough and smart enough to hit good timing. Last year's Buyers capitalized on the very bottom and next year's Buyers will likely wonder why they didn't purchase in 2012!
Carole Rodini closed her talk with this tidbit about multi-billionaire, Warren Buffet, who said (and I'm paraphrasing, as did she) that every market is either a Buyer's OR a Seller's market. The trick is figuring out which one it is and then quickly shifting to the other side of the table. That philosophy of recognizing the shifts in fortune and then running from side-to-side when appropriate, seems to have worked pretty darn well for Mr. Buffet and Ms. Rodini. Hmmm. . .
I bet they work out.
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.