DEEDED INTEREST

Our homes are not a bank

The Aspen Times | Published on March 26, 2023 | View the original article here →

An open house I hosted in the midvalley last week was far from a barn-burner. Ideally, you hope for a revolving door of buyers and agents over a two-hour period rather than the trickle of visits I got that day. The fact I had time to begin typing this column was not the leading indicator I was hoping for. But the low turnout wasn’t unexpected. Truth is, this is not the best time to debut a new listing.

Although the calendar says spring, last week snowy weather and successive powder days helped keep any prospects at bay. The end of the winter selling season always marks an awkward interval. Homes are no longer charmingly snow-flocked with a cozy fire burning from the hearth nor are columbines bursting forth from flowerbeds beside lush green lawns.

Point is, brown turf and leafless trees make for a harder sale. Nonetheless, there I was, at the request of the seller, to put on the usual dog-and-pony show. But this open house was different. This time … the seller was me. Me and my wife, to be exact.

A couple weeks ago, with no intention of pursuing something new, I saw a home pop up on MLS I had always admired. As soon as I got in to see it, I knew I had to get the missus there. Once she walked in, she loved it, too. What began as curiosity on my part had us off and running! Call the bank, write the offer, list our current home, get it cleaned and prepped, and get it live and on-line! Certainly lots to do but fairly routine for me. It is, after all, what I do for a living.

But something was off as I put the sign in my yard and unlocked the door — an unexpected lack of confidence, an uncertainly had crept in. What if no one shows up? Will they don’t like it? Am I priced right? What happens if it doesn’t sell? Like others these days, I recalled we were at the mercy of a new, uncertain market in an environment very different than 12 months ago.

I’ve helped others navigate these questions and doubts, but now had to ask myself: Am I listening to my own advice? Or have I just been BSing past it all for the sake of a sale? I’ve represented many clients over my career, but ironically never one buying and selling at the same time, which is suddenly what we’re doing. Trying to synchronize all the moving pieces in a fixed amount of time is indeed daunting and a good reminder of what my clients experience.

It was just a short year ago that open houses were almost an afterthought, when just the whisper of a new listing could elicit multiple offers before the sign got hammered in the ground. List it, and they will come with the outcome nearly automatic. But no longer.

Interest rates have more than doubled. Higher prices for household goods, utilities, cars, and travel are up. Property taxes are increasing along with insurance premiums. The stock market is down, companies are laying off employees, and then there’s the recent “banking crisis.”

Speaking with a friend and former bond trader, I asked how significant this latest financial wrinkle is. Depositors pulled over $40 billion from SVB in a half a day! That figure accounted for 25% of the bank’s cash and — boom — overnight collapse. Big hitters, many venture capitalists, with seven- and eight-figure balances either ran for the exits or got caught in the flames. The Fed was forced to step in to avoid a cascading effect in broader markets.

But that’s where it gets confusing for those like us wading into a sea seemingly full of alligators. Around here, low inventory has certainly reduced the number of transactions. But interest in homes remains high, and so new listings that do pop up, if priced correctly and quality in caliber, are selling. The interesting dichotomy is sellers are still realizing strong returns, and buyers are beginning to see the reductions they have been waiting for and more room to negotiate.

That’s healthy! With more inventory sure to come on this summer, I’m expecting more activity. And if sellers remain realistic, buyers on the sidelines will act. Might be a good time to listen to your broker rather than your neighbor.

It’s clear the era of easy money is over, and the economy is correcting. But we all knew it was coming. How many times have we all heard the word “unsustainable”?

Will there continue to be short-term losses in terms of equity and paper wealth? Financial experts say bet on it. But don’t forget most of us are running the long game. Real estate remains a reliable, tangible, tax-friendly asset. And it’s more than just an investment vehicle when it comes to the place we choose to call home.