Perception...

A bit more on Value Buying in today's real estate market.

We are like lemmings, we humans. If 25 people stood in Times Square looking up at the sky, within an hour there would be 1000 other people joining them. "The Wisdom of Crowds" was published a couple of years ago and the main premise is that buying a stock that has created the Perception of a winner may be the best strategy for those who don't want to do the work to figure out the underlying value of a company prior to purchasing their stock. Just buy what the crowds are buying. Hopefully, not too late in the "cycle" of growth of the stock price.

The same is true of most buyers of residential real estate.

"Honey, I want this house (because there is a crowd around the block) waiting to see it" - scene from 2005 Open Houses

So, what is the perception now? In many markets, including my own SF Bay Area market, the perception seems to be that things are "bad" and they will "get worse" before they get better. that's the agents' perception! Many buyers think that prices will plummet before 2007 is over, and that there is nothing to be gained by looking seriously at buying now. Let me say that there are good values out there and you can all wait till the interest rates rise before you buy, but I'm buying now - so are my clients. We are not buying like buyers bought in 2004-2006. No urgency. But we are looking for the value in the market and we will find it. We are not waiting to benefit from the bad fortune of others, nor ignoring the law and buying properties from defaulting owners at pennies on the dollar. We are buying value. Decent neighborhoods that are positioning to get better. Look for the places that good retail stores like Starbucks are opening new locations - How about LaFarine in the Laurel district of Oakland? These companies have done their homework - they are buying in Value Neighborhoods. Look for good architecture - maybe a little down on its luck. Look for good floorplan. Look for good lot size. As our population continues to grow, and as more and more homeowners will be forced to buy in denser areas, lot size will mean "alot" - sorry for the pun. Go out looking on a rainy day. That is the best time to go value home shopping. Enough preaching...I just want our clients to be the smartest buyers and sellers in the market. Oh, by the way, the agent that thinks "things are bad and they will get worse" is probably not the best value buyers' resource. More later...