Comments that make us think: what if the market has already declined more than the numbers tell us?
(LAKE TAHOE REAL ESTATE BLOG) What is that old saying about statistics? We’ve heard it came from Vin Scully, the famous announcer and voice of the Brooklyn and then later Los Angeles Dodgers since 1950.
Maybe too Vin heard it from somebody else, the originator of the adage perhaps. Nonetheless, in this case it’s what was said, rather than who said it first that’s important.
We’re sure many of you have heard it, but the old adage about statistics is this: “There are lies, damn lies, and statistics.”
We frequently discuss the data we report here. There’s not a lie in the lot, but there are statistics, lots of them. And you can also be sure that anything we report that has a number in it is fact-based, and we can show it to you. There is no other way.
As we all know, though, there are many ways to look at data, particularly real estate data, where interpretation is often swayed by point of view rather than not. A Seller will interpret identical real estate information differently than a buyer. As we say in the article above this one (here), this is something we see all of the time.
Comments: (The Hue and Cry)
As most of our readers know, we track the median sold price in South Lake Tahoe over time. It is from the median sold price that comes our market reports for you (here).
When we publish these reports, usually any reader feedback we get either thanks us for our work or asks something about a particular listing. Recently though, we’ve heard the hue and cry below.
These are comments from only a few readers. They tell us something. and all are in response to the median sold price in South Lake Tahoe having stabilized since June of 2008 (here).
- “The numbers are disingenuous!”
- “South Lake Tahoe is an anomaly.”
- “The numbers are academic.”
- “I’ll bet you lunch the market goes down another 20%.”
These are comments from buyers, potential buyers. We can tell every time. In general, a buyer’s interpretation of current South Lake Tahoe real estate market statistics these days is prices have not gone down far enough yet, and there is more reduction to come.
Conversely, and again there is no surprise, a Seller’s take on the same information goes something like this: “prices have come down, but not that much, and it doesn’t affect my house, and prices are going back up any minute now.”
The Buyer: A Successful One, or a Professional One?
There is a common denominator to be found in these comments. Their subtext is “I’m not buying until I see the bottom of the market.” This is understandable. It addresses the fundamental issue of all buyers in any real estate market, up or down, and it is “fear,” the fear of having paid too much.
These days the fear of paying too much, and how that applies to South Lake Tahoe in particular, is primarily fueled by predictions found in national real estate news... that do not apply in this market.
What these national reports predict is national home values may decline another 20% in value.
The key reason why this will not happen in South Lake Tahoe is predictions found in a recent broadside of national real estate reports can not be specifically applied to second-home resort markets.
If one does not accept that South Lake Tahoe market forces and price trends may be different than those of the country at large, this could well be the difference that separates the successful buyer from the professional buyer (this being the buyer who actually owns a piece of South Lake Tahoe, and one who is always looking, justifying, rationalizing, waiting, getting ready, knowing the market better than anybody and never does.)
A Deeper Point: (The “Us” Difference)
It’s possible some real estate folk could look at buyer comments like these above and deduct that they come from buyers who are not serious about buying. Those that from such conclusions normally ignore the comments altogether, discard them, and move on (discarding the buyer with the bathwater).
That’s unfortunate. It’s from comments like these where we have the opportunity to inform, explain, distinguish ourselves, earn trust and be both comforting and helpful at the same time. (They can also cause us to learn, which is what happened here. Lets call that the “us” difference.)
In a market like this, at this time, Is there a deeper meaning to the reactions of some buyers when they see current South Lake Tahoe real estate information?
What these comments say more than anything is “the numbers are different than what I thought they would be!”
We have two thoughts about this, and one great question:
One is that some buyers do not understand why South Lake Tahoe home values are what they are. What this tells us is one of two things, either a buyer does not want to understand it, or we have yet to explain it sufficiently.
This is why we are constantly honing, refining, adapting and repeating the message about South Lake Tahoe home values.
Second, and this thought is the kicker, our “eureka” moment! Maybe, just maybe, the median sold price reports are right (they are), and the buyers expectations of a lower number are right at the same time.
Maybe the decline that buyers are expecting is hiding in plain sight, and it is to be found in current listings, rather than only in past sales. What, is this double talk?
No, it isn’t. Lets ask this question, and it’s a great one, “if one can get 20% more house for the money now than before, and it’s true, then is this the 20% further decline that buyers are expecting?
If assumptions are correct, that one can get more house now, and we quantify that in terms of size, age, condition and price, we’re hoping this can become an additional resource for you, and all buyers, to better understand current trends in your South Lake Tahoe real estate market.
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