DEEDED INTEREST
Wild swings and Aspen extremes
The Aspen Times | Published on May 30, 2022 | View the original article here →
A friend of mine with a couple of kids made a comment the other day that gave me a chuckle and a startle. He said, “Does anyone else feel like our country has become like an A.D.D. teenager?” As our son Bridger is only 9, McLean and I are not yet privy to what sounds like a super-fun stage of development; can’t wait! That aside, when applied to the current state of affairs, here in our resort community, our country and around the world, that observation rang true.
Life in the modern world is always evolving, changing, and by its very nature is a dynamic creature. Prior to the COVID-19 age, that “fluid” status quo was more or less predictable, expected and manageable. But since weathering the pandemic, and now that the worse seems to be behind us, the “new normal” — at least since the beginning of the year — is even more an unpredictable landscape of wild swings, record highs and lows, all in a very compressed period of time.
You don’t need me to remind you gas prices are at all-time highs, interest rates are up, inflation’s on a tear and financial markets are approaching bear territory but were suddenly back up last week. The war in Ukraine sure doesn’t help the instability picture. That conflict, as well as our self-imposed war on each other and out-of-control gun culture, isn’t bringing us together but tearing us further apart.
My point is, now more than ever chaos seems to reign supreme. Our collective bi-polarism in terms of ups and downs, extremes and excesses have found quarter to coexist in the same airspace as shortages, closures and disruptions.
Full disclosure, the buddy with the apropos diagnosis for our times is in the same business I’m in. So naturally he applied his analogy of the unruly teenager specifically to our industry. In terms of record low inventory, and unprecedented increases in asking and sales prices, we clearly haven’t shaken the teen angst yet. Talk of bubbles, recession and slowdown only serve to stoke indecision and erode consumer confidence.
Can I let you all in on a little secret or two?
In the world of real estate, it’s not a bad thing to see markets adjust. This upward spiral cannot and will not continue nor is it sustainable. Although it remains a seller’s market, we’re not only seeing more listings as we head into summer, but also a fair number of price reductions as those trying to attract that one “have to have it” buyer are realizing the market may be cooling as fatigue sets in and the price of everything else is up and likely staying there. There’s a growing sense we’ve reached the top and 2023 could be a different animal all together.
Another secret? We brokers don’t know what we’re doing anymore when it comes to pricing. I would argue for many reasons buyers and sellers need experienced and creative representation now more than ever; one being able to provide options outside the MLS, another knowing how to win bidding wars. But I can tell you honestly with values changing on a weekly basis, and the market moving as fast as it is, the comps from the beginning of the year don’t hold water.
That’s not to say we are flying blind. As I’ve said before, ultimately the market decides what something is worth, not the broker or the seller. Rather it’s simply what a given buyer will pay for what’s out there. And inventory is moving.
And for those who may be reluctant to wade into these rising waters as buyers, I say don’t be afraid to swim. Think about it this way: Yes, interest rates are up but remain historically low even at around 5%. The more listings that hit the market, the more competition. That means more room to negotiate and still a tidy payday for reasonable sellers. A healthy marketplace is one where everyone wins.
Last admission. Would I bet short-term on local real estate right now? Not my bag. Although others who had the stones to play a year ago would disagree. But when asked if I’d put my money on tangible assets in the valley right now long term, my answer is a resounding yes. These mountains, this lifestyle, our safe haven pay returns every day. We seem to forget, the short-term ROI for those who move and make a life here is immediate. The here and now is priceless and if this day and age can teach us anything, it’s to live the life you dreamed of today.