In Webster's dictionary the third definition of the word bubble is; "3. any idea or scheme that is plausible at first but quickly shows itself to be flimsy or worthless."
I like most people think of a bubble as being a pretty film of soap that with irradiance floats through the air reflecting all that it passes with a rainbow of color. It floats up on the air currents until it pops.
Now with either or both of those definitions I am having a problem relating it to the Real Estate market we in some states are experiencing.
The market hasn't gone away. It hasn't floated up on some economical heat current, and it sure isn't rose colored anymore.
I think using the term "the bubble has popped" is misleading to the clients in the most negative way.
It is true that the market has changed. For most of us not for the better, but we know it will change again in just a short while. How it will change is for the future to tell us. As I see it there are several ways it will change.
- The sellers will realize that instead of pricing their homes a little above the comp rate they may have to go a little below the comps. That is if they want it to be sold in a timely manner.
- Because of this; the comps will change and will reflect the true market value of the homes being sold. i.e. 900 sq ft home selling for $500,000. may come down to $300,000. (just an example).
- Agents will have to market themselves differently.
- Agents will have to approach the education of their listing clients with the explanation of what the market is doing. Gone are the days of just putting any price on the property in question and sitting back to handle the bidding war.
Once these things are in place we will see a comfortable realistic market until the next time it starts......to change again.
I know some of you will disagree with me and I would like to hear your take on the "bubble" in the market.
Roberta "Dove" Lee
Century 21 Olde Tyme, Norco, CA
HI Roberta.. are you sure you're not an appraiser? ok, ok.. it makes sense to me. I dont think there is a bubble, but a 'correction'. ok, so i used someone else's word to make me look smarter. :) We experienced a big investor 'push' in my area. I saw too many markets pushed artificially by investors not playing nice,.. you know straw buyers, money back under the table..all kinds of not-so-fun stuff. I declined a lot of appraisals just from the intial searches and personal knowledge of the bad boys. Our market peaked, IMHO, nov-dec of 05.. things are finally settling down, and more purchase orders on the appriasal side indicate a shift. we will see. take care Roberta.. BTW, is Dove a nickname or your real name. can we call you something with Dove in it? hhmmm I'll be back! nick-the-appraiser
There will always be areas that "pop"!
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