Living in the Moment

I’m a big fan of Eckhart Tolle and his book The Power of Now. I’ve read it three times. And I’ll doubtless read it again. Were I to boil this book – and all Tolle’s other writings, and the wirings of others who think like him – down into one sentence, it would be this: Live in the moment – the right now – because the past is gone and the future isn’t here yet.

Expanding on that a bit, the right now is all we ever have. Too many of us, myself included at times, spend way too much time and energy dreaming of or regretting the past, and anticipating or worrying about the future. So much so that we often miss the magic in the current moment.

How does this apply to a real estate market in the throws of rapid change? As usual, I have a few thoughts …

The only constant is change
Nothing stays the same for long. At this moment, with mortgage interest having nearly doubled in recent months, we are shifting from an extreme sellers’ market to a more balanced market. A lot of buyers have been deterred – if not scared away – and prices are softening. But demand is still high and inventory is still low. And people who claim expertise are predicting interest rates will settle down in the low 4% range. So, what do these mixed signals mean? Since a real estate license doesn’t come with psychic powers, I say it means we deal with what’s happening in the right now.

Know what you want and what you need
I’m not sure there is ever a time for a casual, tire-kicking approach to residential real estate, but whatever the case, this probably isn’t it. As things shift and change, the one thing that you can hold constant is your objective. Buy, sell, both? Timeline? Financial limits and imperatives? Get all this decided for your current situation and hold on tight. And if your current situation changes, adjust.

Surf the wave
Once you have your wants and needs decided, go out there (with your relator, of course) and work it – as the moment requires. Don’t like the interest rates? Remember that you’re marrying the house, but only dating the rate. If rates go down, you can re-finance. If they go up, you can rejoice that you locked in where you did. See a house you really want? Grab it! Go all out and get it now. If you hesitate you may not ever get the chance again. And don’t look back. Woulda, shoulda, coulda thinking will make you unhappy – and might cause brain damage.

And always know that a good realtor is also living in the moment, ready to roll whenever you are.

Nuggets of Good News

In recent years, I’ve made a concerted effort to view my life and the world around me from a positive lookout. Grateful for all the good things and letting go the stuff I can’t influence much less control. It works – amazingly well, in fact. But sometimes it’s harder to pull off than others.

Lately, with all the bad news coming out of Washington and Eastern Europe, continued Covid variants, fires, floods, heatwaves – to say nothing of interest rate hikes … Wow! It’s been tough.

But there’s always something good afoot if you look for it. So, in that frame of mind, the following …

Market Balance
It seems things are finally slowing down – a little. Rising interest rates have blunted the purchasing power of many buyers and this is beginning to show in pricing and days on the market statistics. Inventory is still tight and lots of buyers are still shopping, but supply and demand are coming, if not actually into balance, less out of balance. This makes buying easier – less of a frantic bidding war, and possibly not quite so expensive.

Change Will Come
There’s a quote going around real estate circles these days: marry the house, date the rate. The house purchase is a long-term deal like marriage, but the mortgage rate can change, like dating. If rates go higher, you’ll be glad you snagged a house at the rate you did. When rates go down – and they will because they always do eventually – you can refinance. Playing the long game means buying a house is never a bad idea.

VILLAGE Developments
We are bigger, badder, and better able to serve you than ever before! VILLAGE has long been among the largest locally-owned firms, but via two recent mergers, we have joined forces with Parks and Pilkerton, to become the largest by far – both in dollar volume and number of transactions. As a VILLAGE agent, I now have more than 1,600 fellow realtors in-house with whom to share expertise, advance notice of listings and buyer needs, and referrals. Three brands, all one company. There is strength in numbers.
 
Additionally, VILLAGE-Parks-Pilkerton has joined Leading Real Estate Companies of the World, a global affiliation of over 500 brokerages. This offers us access to nationwide and international marketing for our listings, and access to incoming and outgoing realtor referrals. This affiliation will become more and more important as Nashville continues to boom and assume its place on the international stage. 
 
The future at VILLAGE looks good!

Best Foot Forward

Despite recent signs of a softening, the sellers’ market continues to continue. Regardless of price point it’s still quite a challenge to actually win a deal on a house. So, it pays to put your best foot forward as you navigate the path.
 
Actually, it has always paid to put one’s best foot forward – in real estate as in the rest of life – but how we define the term is – as all things are – evolving and many-sided. 
 
“Best foot forward” in real estate starts with mindset and moves toward strategy and tactics. So, let’s start with mindset.

Optimistic 
Understand that the process may be long and discouraging. Sometimes things happen quickly, sometimes not. It may one offer, it may take five, it may take ten. Stay positive. Don’t give up. It will happen. 
 
Realistic 
You will not find a perfect house. No one ever does. Look for a house with zero issues, and you’ll still be looking five years from now. This has always been true, but in this market, even more so. These days, “perfect” will involve some compromises.
 
Emotion-free
The house-buying process always involves emotions. How could it not? It’s where you are going to make your home. But these days, it pays to remember that this is, first and foremost, a business deal. Getting your feelings hurt if you don’t get the deal, or if the sellers won’t offer any concessions is understandable, but not helpful. Take your feelings out of the picture and look at the business angle with a cold, clear eye.

As for strategy and tactics …

Full Underwriting
When competing with a bunch of other buyers, proving your credit-worthiness is critical. A pre-approval letter doesn’t carry a great deal of weight these days. It’s best to go in with your lender’s underwriters’ full approval, so the only major hurdle is the appraisal. Sellers are looking for this these days.

Shop Below the Limit
To get a deal, you’ll likely need to go over the asking price, and/or be able to prove you have cash on hand to cover an appraisal gap. Don’t torture yourself looking at houses at your price limit. You probably won’t be able to get one.

Highest and Best - Always
Unless the house has been on the market for a month or more, it makes absolutely no sense to go in with an offer that isn’t your highest and best. With multiple offers, sellers sometimes call for highest and best – sometimes, but not always. Why wait for them to ask? Decide how badly you want the house and go in loaded for bear.

Cracks in the wall … ?

Unless you’ve been living in a cave for the past several years – and if you have, how did you get internet access to read this message? – you know we are in a very lopsided sellers market.

I am working with buyers who are wondering – out loud, so I can hear them – if they should just drop out and rent for a while longer. Perhaps rent for the rest of their lives.

I think this is a bad idea.

For one thing, if you can get a deal at, or near, what you are paying in rent, you are ahead as an owner. It may be a shopworn cliché, but that doesn’t make it untrue: with a mortgage, you are paying rent to yourself, not someone else. Gradually, equity builds. And you have a much better shot at itemizing your deductions which will pay off in April.

Three examples:
 
One: This Monday, I got buyer clients under contract. Their limit had been dropping with the rise in rates and this house was priced about $15,000 above their top dollar. I told the listing agent that my folks loved the house but could only offer to their limit, fully expecting that to be the end of the story. Two days later, the agent called me back and said they hadn’t had a serious offer and my folks could have it for their number. 
 
Two: I’ve got my eye on a condo that a client likes but believes is listed about $25,000 too high. It is pushing the ceiling on comps, but it’s in a very desirable building, and I expected it to sell quickly. Eight days later, it’s still available, and we are circling back around. My client might make an offer.
 
Three: I’ve got a client who own a duplex. Several months ago, I was approached by a corporate buyer about selling, and my client asked $700,000. They came back and said the mid-$600s was as high as they could go, so no deal. The same buyer called me yesterday afternoon to see if there was still any interest in selling, but said lending in the wholesale space had tightened up and he could only offer in the high $500s. 
 
Let me be clear! This is not a bubble bursting. Our fundamentals are still strong. I seriously doubt prices will go down – but the rate of increase may moderate. And the more aggressively priced listings will still sell – but at less than asking. 
 
Let’s all keep our eyes on the prize, watch closely as things develop, and keep making offers. 

Nashville Real Estate: Past as Prologue

Joan Didion has been one of my favorite writers since the early 1970s when I was in college and discovered her essays in magazines like Esquire and The New Yorker. Elegant, precise, intelligent writing. As hard and intense as a clear blue sky, and sometimes laugh-out-loud funny too. Wonderful!

She died a couple of months ago at the age of 87, and since then I’ve been re-reading. 

In one piece titled “On Keeping a Notebook” she ruminates about the value of her life-long habit of writing down snippets of things she hears and sees. This line jumped out at me when I (re)read it two weeks ago, and I marked the page:

I think we are well advised to keep on nodding terms with the people we used to be, whether we find them attractive company or not.

She was talking about the value of knowing oneself, but of course this reminded me of real estate. Doesn’t everything?  And I have some thoughts. Don’t I always?

These days, in a super-intense sellers’ market, with prices pushing ever higher, it’s easy to assume that everything’s going to hell in a handbag and to long for the good old days. No question there are serious challenges these days – especially for buyers of modest means – but the old days weren’t always so good. 

Which is where the Joan Didion quote comes in. Let’s try to remain on nodding terms with who and where we used to be. 

Interest Rates While rates have recently drifted upward to above 4%, that is still a historical low. When I bought my first house in 1978, I got a “great deal” at almost 8%. Within a year, rates had risen to double digits, hitting a high of 16% in 1980. They didn’t come back to single digits until the late 1990s. Had I waited, I’d have been frozen out of the housing market for more than a decade. Do we want to go back to that?

Housing Discrimination I live in College Hill, a neighborhood where middle-class African Americans built houses in the 1950s and 60s, just before discriminatory lending was finally outlawed. I have a very nice house on a very nice street. But the people who built these houses built here because they had to. There was no other choice. Do we want to go back to that?

These days, in a super-intense sellers’ market, with prices pushing ever higher, it’s easy to assume that everything’s going to hell in a handbag and to long for the good old days. No question there are serious challenges these days – especially for buyers of modest means – but the old days weren’t always so good. 

I know things are a little weird right now. A more balanced market and more (a lot more!) affordable housing would benefit us all. But taking the long view – both behind us and ahead –brings a little perspective. And that’s a good thing.