Westchester View

Sadly, when I hear the word “trust” and “real estate” in the same question – my mind really turns to salad dressing.  They just don’t seem to mix at all.  We need look no further than YouTube to see evidence of the public mistrust of real estate “professionals”…and yes – that word is in quotations for a reason  – and here is why?

Almost anyone with a pulse and half a brain can get a real estate license:

This was something of a shock to me.   I came from a field that garnered a great deal of respect, but it took YEARS of post-graduate education to be  considered a professional.  Yet, in just 8 weeks – attending class twice a week – I was licensed to help the public purchase or sell what is generally their biggest financial asset. Does anyone see a disconnect here?

The result has been a cadre of agents  – some with significant business – that appear to have nearly nothing between the ears.  This is simply because the process is not selective.   Many agents  have indeed applied themselves to the process and have acquired a great deal of knowledge through their licensing classes, CE classes and designations – as well as on-the-job.   The trouble is, since almost everyone passes, how is the consumer able to  evaluate these agents.

Consumers are treated like shark chum:

If its easy to get started, why not try it? And thousands upon thousands of people do  just that every year.  If you can’t throw a rock without hitting an agent then there are simply waaaay too many agents for the amount of business available.  Since agents are only paid when a transaction closes, that creates fierce competition for every qualified buyer or seller.

Desperation is a powerful motivator and it will induce many agents to do or say literally anything to secure the buyer or the listing.   I always refer to the monthly list of expired listings as the “feeding frenzy.”   There are agents that are all over hundreds of  homeowners a month like a bad rash.

When buyers walk into open houses they often feel as though they are under assault by an army of agents all of them trying to convince buyers that they are the only buyers agent for them.

If agents have any doubts about how the buyers and sellers feel about the predatory behavior – the videos below pretty much sum up public sentiment:

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Back in the 1980s there was  a commercial for NY State Lotto.  At then end of the commercial there was the tag line “But you’ve got to be in it to win it!”  Now, I’m not suggesting that we all go out and buy $50 worth of lottery tickets each week – but I do think the line “you’ve got to be in it to win it!” applies to real estate.

Now, If you bought at the height  of the boom, chances are you are hurting right now and would firmly believe  that anyone who would suggest that you go out there and buy real estate needs a lobotomy.

However, if you are a thinking of buying a home in Westchester NY – and you have the means to purchase – then CONGRATULATIONS!   you have won the real estate lottery!

Real estate is on SALE right now….

Prices are down from about 20-35% across lower Westchester.  That’s a SALE folks!    If this were a BMW, some Jimmy Choo shoes, a new flat screen or an iPad,  you would have everyone crawling all over each other like a re-run of  Black Friday.    With the low interest rates that we now enjoy, affordability is at highs not seen in over a generation.  Further, much  of the lower Westchester housing market is flat or increasing in price.  Pockets that are declining are pretty much bouncing along the bottom.  The big dramatic  downward moves  have morphed into very slow, slight declines, flat lines or a gentle increases.   The market is flat – not tanking.

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A few months ago an agent responded to blog I wrote about first time buyers.   Her comment was that “First time buyers today don’t know what is good for them.  They want their cake and ice cream before they’ve had their main meal. “  I wish I could remember the blogger’s name – but I forgot the post and only remember the quote.   I had understood what she was saying, but  at the time, felt the judgment was more than a little severe.  However, recently I’ve recently had  a cooperative for sale in a very lovely building and sometimes selling something small in a complex where everything is easily compared brings buyer behavior into sharper focus.  Having observed the sales in that building – such as they are because volume was very low until just a few weeks ago – the agent is largely correct…wanting the glitz without the substance  IS  impacting the decision making process of first time buyers – and I predict that it will come back to haunt them when they sell.

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This is a tough topic for  me to address objectively.  However, I have seen many blogs recently from agents touting their expertise as “local experts”.  Meanwhile, I’m also seeing quite  a number of other agents bragging about the number of listings that they have.  Most of these agents can not possibly accumulate the raw numbers by being local. Many of these agents have listings that are scattered far and wide – sometimes in more than one state or at least in several counties.

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Many homeowners in lower Westchester have been hoping to downsize but stay local.   In some cases, the children are gone but these empty nesters have careers that keep them local or perhaps some have grandchildren that live in the area and they wish to stay near family.  Particularly after the big storm that we had yesterday – downsizing to something a bit easier to manage feels right for those who have been struggling with Nor’ Easters and hurricanes.  We now seem to be having the storm of the century every six months – and tackling all the resulting issues can be a lot of work.  I know it is – because I own my own home….

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In the last few months I have heard variations on this statement in various forms and guises.  My knee-jerk reaction to comments like this aren’t very PC.   Generally it would be something like  “Everyone settles to some extent.  We all have to “settle” for less than we would ultimately love. That’s life.”  Truth be told ever since I’ve been in this business I’ve noticed the same trend. Everyone seems to want about $50-$100k more than they can possibly afford.

Tighter lending standards play a role…

Part of this angst  is due to tighter lending standards which means that relatively solvent families have to squeeze into less home than the more relaxed standards of the past would allow.  We got used to those loose standards and being allowed to buy a large house seemed like a right, not a privilege.

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Right now we’ve got a renting bubble. At this point it is almost as irrational as the housing bubble of 2005.  Just as scarfing up McMansions with no money down loans was irrational – now many potential buyers are obsessed with renting to  a point where they are hurting their own self- interest.
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No one has a crystal ball  so determining when a market is going to hit bottom is pretty much like shooting craps.  Sooooo – anyone trying to TIME THE BOTTOM is clearly a gambler.  Its not savvy, its not cool or even all that smart – and yes…it is RISKY to try to time the bottom.

Gambling on lower prices and lower interest rates….

People think that if they haven’t made a decision to buy that no decisions were made.  That makes them feel “safe”.  NOT TRUE.  The buyer made a decision and that decision was to punt.   So in reality, the buyer is rolling the dice that the market will decline more or at least not improve.   They are also gambling that interest rates will remain at record lows.  As one famous blogger (Lenn Harley) puts it to her buyer clients “The market will bottom six months before you decide its time to buy a home.”

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Recently, I’ve had several inquiries from would be home sellers about whether now is the time to consider downsizing their home. Scaling back is never easy and should not be undertaken lightly as it means a significant change in your lifestyle, but from a financial standpoint, I would have to say that the answer would be a very strong “YES!” if you are a Larchmont homeowner.

In the midst of a national housing crisis many would-be sellers are sitting on the fence asking whether now is a good time to scale back into something smaller.  This is particularly true of empty nesters or soon-to-be empty nesters.  With real estate – as with all large ticket items  – it is best to buy low and sell high.

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