My life as a statistic
Did you go to my open house this weekend? No? That’s OK. Neither did any of the other 6.8 billion people on Earth.
I’m getting the sinking feeling that I’ve turned into a statistic. I don’t know when it happened exactly — like a recession, the joining of a statistical group is often only apparent in hindsight — but I sure seem to be there now: I’m one of countless Americans saddled with a home he can’t sell.
My house has been on the market for nearly nine months. In that time, I’ve had perhaps ten potential buyers look at it. Of those, only one was serious enough to return for a second look. To create some fresh interest, my realtor held an open house this past weekend. As is typical in those situations, I went somewhere else for the afternoon. At the end of the open house, my cell phone rang and a surge of excitement coursed through me. Was a contract being faxed over? Had a fistfight between competing buyers broken out on the front sidewalk? Maybe, at the very least, my realtor overheard a visitor whisper to her husband, “Honey, I really like this house.”
I didn’t even get that scrap of optimism. Instead, the call was to inform me that the realtor had taken care to lock up on her way out. You know things are grim when the best news you hear is that burglars didn’t get a free pass into your home.
I’ve realized two things recently about the housing market which together add up to a disheartening reality. The first is that the real estate marketplace, like that of any commodity, is as sensitive to psychology as it is to the law of supply and demand. For all the news about mortgage foreclosures and empty homes, neither the number of homes in America nor the population of the country changed dramatically in the past six months — meaning supply and demand have stayed roughly the same. (Remember, everybody has to live somewhere.) What’s different is that the system of assigning market values to homes, always a subjective exercise anyway, underwent a correction after a long period of inflation.
The demand hasn’t lessened to an appreciable degree. But if a home buyer repeatedly hears that prices are expected to fall by 30 percent (a prediction I heard recently), who but a fool buys now?
It becomes a self-fulfilling proposition. Buyers sit on the sideline because they think prices have yet to go lower, or because (like me) they have to sell one home before buying another. The longer we sit, the lower the prices fall, until — bingo! — the psychology reverses itself and everything suddenly looks like a bargain.
The second effect on the housing market is the price of gas. With every upward tick, the long commute that usually comes with suburban living becomes more of a financial burden. Mine is a suburban home, and I’m starting to wonder if buyers don’t even bother to look because their acceptable commuting range has been adjusted downward. Indeed, the one buyer to evince any serious interest in my home was a retiree — and thus presumably freed from such considerations.
It’s a good thing I like my home, even if it is too big for my needs. I may be there a while.