It’s 2011. Not 2010 or 2009. Viva 2011
What’s your real estate market like this week? Is it better than it was a year or two ago?
Back then we had the difficult task of sharing mostly bad news. A rational Fear Of Loss kept buyers who wanted to move from making a move. It was simple logic, buy too soon and home values might fall, resulting in a financial loss.
Last year the Federal Homebuyer Tax Credit artificially stimulated 1st Quarter home sales. The free-money party ended in April of 2010 and real estate sales activity went from gangbusters to bust. It pretty much stayed crappy until January 2011.
From what I can see across the inter-webs and personal experience, the unstimulated 1st Quarter of 2011 is equal to or better than the artificially stimulated 1st Quarter of 2010. Which means that most likely, the balance of 2011 will be way better than 2010. Not a month to soon, amen.
But I’m worried. Real worried.
I’m Worried About Shell Shock
It’s been so crappy for so long, some us may be suffering from Shell Shock. When someone asks if now would be a good time to buy, we start mumbling, our shoulders slump and the light in our eyes dim. We hem and haw. Because we’ve been so beat up for so long, our answer limps from our mouth to their ears. On occasion we allow past emotional scaring to over ride current intellect and logic. This is normal human behavior, but we’re not paid to be normal. We’re paid to perform.
People are counting on us for unbiased and expert real estate opinion and analysis. When they ask the question, “Is now a safe time to make a move?” they expect a thoughtful and intellectual answer. Not an emotional reaction steeped in Shell Shock.
It’s Time To Bury The Past and Rise UP
Note from the editor: The video at the top of this article is of Maya Angelou’s “And Still I Rise,” particularly relevant to the theme of this article.
The Fear Of Loss is perpetually valid. Yesterday, the likely hood of suffering a financial loss by buying in falling market was high. Today’s and tomorrow’s market is 180 degrees different. If our buyer clients want to make a move and they don’t, waiting may cause them financial loss.
It’s a new day and a new market. Let’s think, advise and act like it.
Let’s start by reviewing and sharing a few important factors with our homebuyer clients.
Price & Value and Cost & Expense Factors
Advising our buyer clients to Not-Buy-Now because home values may go down, and they will have lost money by overpaying, is an example making a decision based on the Value & Price factor. Last year in many micro-markets this was smart, simple and logical.
Today, if we’re sincere about helping our clients avoid financial loss, we’ll want to include Cost & Expense factors in our advisory analysis.
Unless our buyer clients are paying cash when they buy, they’re going to use mortgage financing. Their mortgage interest rate determines the Cost & Expense of buying and has a bottom line effect on whether waiting to buy will result in a financial Win or Loss.
Here’s an example of what I’m talking about:

Here’s how we can use both Value & Price and Cost & Expense Factors in our advisory analysis. To figure out if it’s better to wait or make the move, consider alternate future outcomes.
Three What If Scenarios
Keeping in mind that our local and national economies are improving, inflation is real and mortgage interest rates, are rising, We can evaluate the financial risks by asking ourselves which of these three scenarios is most likely:
- Home Prices stabilize and mortgage rates rise. Using the example in the picture above, if mortgage rates rise to 6%, waiting may cost our buyer clients the extra expense of $175.86 more per month. If the value of the properties they’re interested in don’t drop more than 13% in value before mortgage rates inflate from current rates to 6%, the decision to wait would create a financial compound fracture. Waiting would mean they’ve lost on two fronts, Value & Price and Cost & Expense.
- Home Prices drop more than 13% and mortgage rates rise to 6%.
- Home Prices drop and mortgage rates stay the same or fall too.
If you believe that home values in your market will fall faster and further than mortgage rates will rise (2. or 3. above), then advising your buyer clients to stay put is the way to go. Keep your eye on the market and when you see a favorable entry point, advise them to make their move.
If you think prices won’t drop more than 13% before mortgage rates rise to 6%, then your logical left brain will tell you it’s wise to advise your buyer clients,
“Because home values are less likely to fall more than interest rates will rise, now is a safe time to make move you’ve been waiting and wanting to make.“
Do your homework on property-value-trends for your micro markets, consider the implications of rising mortgage rates, Rise Up and advise with confidence.
Here’s what I think about my micro-market. . .
I think home values are stable and some neighborhoods will enjoy a rise in prices/values. Mortgage rates have risen about 1% in the last four months and will continue to creep up.
When my clients who would like to move, ask me if it’s a safe time to move, I would discuss Price & Value and Cost & Expense factors with them. Afterwards, we’d be out the door dream home shopping. Pronto.
What do you think?
What’s happening in your market? What are you advising?
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Cheers and thanks for reading.
Eric Blackwell
June 20, 2008 at 12:47 pm
Randy Pausch is amazing.
I have heard him several times. Always well worth it.
My personal favorite would 7 habits of highly effective people. I had the opportunity to meet Steven Covey (20 years ago now–yikes!) when I was just out of college. Amazing.
Thanks Carson
Ines
June 20, 2008 at 1:50 pm
This is a department that I always need help in…..multi-tasking is my game and I keep adding hours to my day and decreasing sleep time. I know I’m efficient between my 3 kids, my office, the house, soccer, baseball, swimming, tennis, showings, blogging….etc. – but I will pay attention to this and will let you know if I was able to consolidate.
Pensacola Real Estate Broker Robin Sherman
June 20, 2008 at 6:39 pm
There is NEVER enough time . . . Funny, but I just blogged on this today on Active Rain (https://www.activerain.com/blogs/robinsherman) because one of my three – or is it four – e-mail inboxs hit 1300! I’ve decided that Merlin Mann is INDEED the Man! I’m trying to be disciplined enough to incorporate his tips for a Zero Inbox. Wish me luck!
Dan Connolly
June 20, 2008 at 10:38 pm
Thanks for that video. Randy Pausch is a mesmerizing speaker, I was moved by his “Last Lecture and I am glad to hear he still with us. There are some great tips in there!
Paula Henry
June 20, 2008 at 11:38 pm
Carson – There is never enough time – thanks for making it short. There comes a time when you have to hire an assistant to maintain the non-dollar productive activityies. I think my time has come.
Holly White
June 21, 2008 at 3:51 am
Well it’s 4:45 a.m. as I read this blog. I think I need better time management skills… and a life. Thanks Carson for the great info. I need to pull the 7 Habits back out of my library and wipe the dust from the cover. I’ve only watched the first 15 minutes of the Pausch video, when was that made and how is he doing? Does anyone know? Pretty amazing his choice of time to give back to the world about time management with his limited time here…
Eric Blackwell
June 21, 2008 at 4:43 am
@Holly – Not sure when it was made. Last I saw, he is still with us, but the cancer he is dealing with is working on him pretty hard. His clear sense of what is important is a huge inspiration to me.
Holly White
June 21, 2008 at 4:48 am
@Eric – to me as well. And to add to that, his sense of selflessness…
Dan Connolly
June 21, 2008 at 9:09 am
Randy is still with us. Click on the link directly above the video and then click on his daily update page and he has a post this year on father’s day.
Glenn fm Naples
June 21, 2008 at 9:32 am
Hi Carson – thanks for posting the video – it was very inspiring – the resources you posted are excellent.
Time management takes change and we as people have to leave our comfort zones in order to make changes.
Maybe we need to learn about change management before we embark on time management.
Jason Mook
June 21, 2008 at 9:53 am
Getting Things Done by David Allen can be above most people in my opinion. He comes off as having been born with a silver spoon in his mouth. I would recommend skipping the book and grabbing a copy of his whitepaper, Getting Things Done & Outlook (or Lotus Notes) – you’ll understand the concepts that he writes of in his book, and have a very practical guide to setting up your software to help with time mangement.
Ken Smith
June 21, 2008 at 8:55 pm
Always seem to run out of time, thanks for posting the video.
Dan Connolly
July 25, 2008 at 5:34 pm
Randy Pausch succumbed to Pancreatic cancer today. RIP Randy!
Glenn fm Naples
July 28, 2008 at 7:32 am
Dan – I heard that on the news just this weekend. It is weird though that someone posted an article about managing one’s email inbox from Inman Real Connect.