Quantity of Leads Way Down. Quality of Clients Way Up!
Placing my Broker’s hat upon my head please allow me to share my humble insights.
About mid 2022 I was beginning to feel a bit anxious. It was in the air. As interest rates, inflation and the threat of recession began to increase along with the residue of the COVID COP OUT (Sorry but after almost 3 years I’m over it)
still looming over our heads we were beginning to see folks starting to ease off the throttle be they buyers or sellers.
Thankfully, it hasn’t been an abrupt ‘08ish type of nose dive; At least not yet. There are still many full price offers, even some multiple bidding activity going on in certain areas while price-points seem to be holding their own.
San Diego, albeit it has slowed somewhat, is still considered one of the best places on the planet to live. For that we are very fortunate. But the buying frenzy, as we’ve known it, appears to be in our rear view mirror.
Higher interest rates have brought about increased DOM and fewer folks can afford those unpredictable ARMS. Add to that the buyer’s diminished LTV buying capacity in order to qualify. Finally and probably most importantly, the question of where to go after you sell your home has become a stark reality in California. Unless you’re planning on leaving the State with a wad of dough, buying that 40 foot land yacht or better yet real yacht or moving to Barstow in an affordable Manufactured Home Community your options are somewhat limited. 
Well, so much for my real estate broker’s hat. Please allow me to replace it with my Manufactured ADU Dealer and Contractor’s hat.
I was resigning myself to a brisk cooling off period as we are one of the hundreds of satellite businesses participating in the RE space. I thought it might even be a good time to pack it in and take that extended vacation Janis and I keep promising ourselves. Well, no such luck. I find myself staying pretty busy in the BACKYARD HOME biz. However, there have been some interesting changes in the dynamics. We’re no longer seeing the 30 to 50 new inquiries per month we had grown comfortably accustomed to since the new State laws were enacted in 2017.
We thought the well was running dry. However, what we were seeing was just the opposite. While our volume of new monthly inquiries had decreased dramatically, instead we are now getting 10 to 12 new inquiries a month. But with a few interesting twists. Instead of having to hold our clients hands and nurture them through the tire kicking and lookie lou phase, we are getting a whole new evolution of “GET ME DONES”. Folks that were sitting on the sidelines but are now ready to pull the trigger.
Now might I remove my contractor and dealers hat and
replace it with my Investor’s Derby andspeculate just a tad.
My theory?
- The preponderance of folks we're dealing with are Baby Boomers who have either sold their homes and looking for a good place to park their cash while they explore how to generate their best ROI potential before making their next real estate investment.
- Or because they decided not to sell their home with mountains of equity or perhaps even paid off because they didn’t no where they would/could move.
- Or because they wanted to age in place and explore ways to generate additional revenue streams on the very earth they own beneath their feet.
- Or because they’re investors looking for additional revenue potential in order to maximize the ROI on their investment portfolio without having to purchase additional properties in these uncertain times.
Bottom line there is still a lot of cash sitting on the
sidelines looking for a reasonably safe place to park.
We all know where the stock market is nowadays and if you’re thinking about Crypto you may want to wait for the next shoe to drop with that exciting adventure. Buying real estate right now, at least in Cali, may not have your best interest at heart either.
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