9/2/2022
I turned 50 the other day. Big milestone that I thought would horrify me but I am wearing it as a badge of honor. With that I am feeling like I have a taller pedestal to preach from - or perhaps a more valid vantage point? Regardless, I am noticing something and being 50 makes it a legit observation - We are the engines of the economy - this really isn't news of course but I see how impactful fear is upon how things operate in our housing market. My tongue in cheek subject line is really an expression of this observation - I am a bit tired of the fear mongering when it comes to housing as I see how negatively it clouds the perspectives of both buyers and sellers.
I have had 9 listings this year - that is one a month, so I have had plenty of opportunity to observe the shifting attitudes of buyers as they come to the open houses. Of course I have had plenty of buyers as well, so I've had their input but the buyers who come to my open houses, those are the barometers that I find fascinating.
During the first quarter we were still high on the COVID crisis - the whole scarcity mentality - and with that came buyers feeling desperate and willing to settle for anything. During the second quarter more inventory came on the market* and interest rates began to rise, offers were still high and plentiful but less so, particularly at the end of Q2. Buyers were still in scarcity mode but simply could not afford as much. Then came the 3rd quarter, where we are now, and the interest rates have continued to climb as the stock market has reduced those large down payments (less free money vibes) and significantly changed what a given buyer can actually afford. But more than that, as sellers balk at the offers (compared to their neighbor, friend or Redfin prediction from 8 weeks ago) and decline offers received they languish on the market for 3-6 weeks creating fodder for clickbait.
Here is the reality - if you plan to keep your home for more than 5 years and if you plan to live in your home, as your primary residence and not an investment to flip, and if you would have been paying rent elsewhere if you were not in said home, then go ahead and buy the home. Be smart about it, don't fall for staging or paint or pretty countertops**. Do not buy a home on a busy street, next to a gas station or with any other major unchangeables without understanding that the reduced price you paid will be the reduced price it will sell for later. If possible, do avoid buying when there is limited inventory and do buy when there is significant inventory. Do make offers during holidays. At the same time do understand that you cannot really time the market and what feels like overpaying is likely what it takes to win and that dollar amount will feel insignificant in 2 years so just go ahead and do it. Don't belabor the little things. No one is generous when it comes to home sales, everyone wants to maximize their profit, it is not personal. Focus on the practicalities and the long term results of the purchase. And most of all, do not pay attention to the online predictors of prices in our inner east bay market. Redfin and Zillow do not understand the value of proximity to Berkeley Bowl, or Chez Panisse nor do they understand that one home may have a 75K pest report while its twin down the street has a new foundation.
My point here is that housing is not a short-term investment, it is a necessity, like food and therefore must be treated and considered as such. It is also a malleable asset that can be improved over time. In addition, with or without your improvement, in our inner east bay, values will increase over time as neighborhoods continue to evolve. When I first started in real estate South Berkeley was considered marginal because of issues centered around San Pablo Park. Now people want to live around the park as it is a gathering place for kids, soccer games and birthday parties.
In closing I will say this - I see this cooling off of the market as a net positive. A calming of the prices allows for more people to get into homes in the first place. Ultimately, diversity in the buyer pool benefits any neighborhood or community. But most importantly, remember that we are coming out of a long but bizarre anomalous, world-wide pandemic that rocked us all in every conceivable way so some adjustment is to be expected.
Home is where the heart is.
*this really is a golden opportunity for me to push my MO about selling in the new year when nothing is on the market.
**these are all things I can discuss with you offline - if you want to spruce up your space, please do talk to me, it doesn't have to be that big of a deal.
Sarah Ridge - Realtor - 510-860-3435 - Lic#01990459 [email protected] www.sarahridgerealtor.com
1577 Solano Ave,
Berkeley, CA 94707
