Regardless of the state of the real estate market, there will be those somewhat desperate souls with the burning desire to own, logic and rationality be damned. I think powayseller may have not initially recognized this or at least discounted it heavily in taking her bearish stance years ago. Her current recognition of this market force appears to be one of the foundations of the “new” powayseller position. A buyers’ agent developing an opinion based upon clients’ emotions, of course, lends itself to its own myopic tendencies. I would argue that there are an awful lot of bears still out there and not many of them are aggressively seeking real estate right now. Therefore leaving the buyers demographic (investors aside) to be comprised of those who may be less than financially rational and instead just want to get that home and get it now. So it’s no surprise that is the mentality she is seeing – that’s the demographic that’s out there shopping.
Frankly I do not know where we stand as far as inventory goes – are we low on a historical basis? Very low? I know we have extremely low interest rates, government subsidies, properties slow to market due to lender strategies, etc. With this background, do we have enough logic-be-damned gotta buy now buyers to keep transactions flowing in a low inventory environment? Seems to be the case and that’s what I would argue if we are in fact in a low inventory environment.
At the end of the day hindsight is of course 20/20. But I think powayseller was calling for an approximate 50% devaluation – is that about right? We have certainly seen that or something close to it in plenty of zip codes in SoCal, have we not? In a general sense, she was of the mindset that we were going to experience substantial devaluation, and we have seen just that in many areas. And I don’t think we are even close to being done yet in the more upscale neighborhoods.
So I’m clearly not getting it, because massive damage has already been done, so she cannot possibly be changing her tune regarding those areas as the game is already over. Now we are left with better areas that have yet not experienced the same level of devaluation – so I’m assuming the new call is that it is these areas that will avoid massive devaluation? We’ll see – as we have already seen, hindsight is 20/20 and the numbers will not lie.
