Thursday, November 08, 2007

For the Record: November Three Years Ago...

For the record, I wrote the following three years ago this November. Humility is no virtue of mine. However I'm in no way saying this view has been vindicated -- instead, I think the ultimate outcome of the housing market, particularly in Houston, very much remains to be seen. Even more has been thrown into the immediate mix, including the increased (!) volatility in oil-producing nations from even just 3 years ago, to the increased volatility of refinery capacity (when is hurricane season over!?). At any rate, there were some things quite structural in nature that were visible three years ago that are hot topics today. So not everything should come to us as a surprise, and for many besides myself I know it doesn't. ;-)

From November 2004:
Usually I don't like to speak on issues that are already well-covered, but the economic position of the U.S. right now is a topic that cannot be spoken of enough. With real estate and talk of currency troubles (aka: interest rate watch), we are watching like hawks these issues. Builders all around many metro suburbs are speculating with relatively cheap money, and banks are loading their balance sheets with really shaky things like "100% loans" (like an ARM with a balloon payment/refi instead of an adjustment). It looks scary. Moreover, it can happen like dominoes -- one big entity makes a move, and everyone (foreign financiers of U.S. debt) starts second guessing.
If only this stuff didn't matter. Again, there are many more factors now with which to analyze the situation than there were back in 2004, and there is plenty of reason to be hopeful, particularly in the strong Houston market area and economic sector. Locally here in N Houston Metro we have seen no notable decline in demand and continue to describe the specific Houston area as relatively balanced in supply and demand, as has been the case historically for many years.

[Update 11/24/2008: One year later, demand in the Houston area has definitely softened, with overall sales volume year-over-year in excess of 20%. The silver lining is that prices are holding relatively stable for now. But then we never had the pricing bubble that other areas of the country experienced.]

Wednesday, August 08, 2007

Why Do Bad Things Happen...

In real estate, people sell their homes for many reasons, the most generalized category of which could be simply "life changes." Whether a family is being transferred or empty-nesters are looking to "downsize", it's life's big stations or events that often induce the change.

All too often, however, the life change is something painful. A divorce, a death, a catastrophic illness... any number of ways that life can truly surprise and shock.

It's an age-old question, but one that we confront in our business time and time again: why do bad things happen to good people?

On many days, I am likely to answer simply, "I don't know. But I bet they happen as often as much as good things happen to good people, or 'nothing' happens to everyone, or good things happen to good people, or -- as much as we think we see it too often -- good things happen to bad people." And yet that answer always feels like it falls short. And it does.

Some people approach the question by going cosmic. Perhaps there's some kind of karmic cycles playing out in and around us. Maybe it's of the social sciences domain, and we all invite the kinds of events around us by how we all live and work together as part of the grand social contract.

Once again, to all these ideas and more, I can still only answer with that great cosmic thud, "I don't know."

But I do know what I see every day. It is one of the more interesting and compelling -- and sometimes very difficult -- lenses through which we get to view the world as real estate brokers: life changes. We see, because we often have to, behind the social veil that gives most of us privacy over our most painful episodes in life.

Nobody really expects their real estate broker to be someone who can say credibly, "You are not alone." And I can't figure out how to say that in such a way that is helpful and doesn't perhaps imply a demeaning of someone's uniquely painful circumstance. So sometimes we as brokers are best left just to listen to what someone wants to tell us and respond to them and their unique circumstance the best we can, because every person's circumstance is unique in several ways.

People might not expect their real estate brokers to be credible on the point of knowing when someone's painful life circumstance is shared by others, whether someone is truly "not alone." Saying so to someone in the moment may sound like hollow or synthetic sympathy. But in truth, as real estate brokers, whether we say it or not, we really are in a position to know.