Frozen in Fear?

With all the market uncertainty these days, lots of people are sitting on their hands - afraid to make a move.  In this episode, we share our thoughts on current market conditions, where things are likely to go, and what it all means to buyers thinking about retiring, downsizing, and moving to a place like Prescott.

hello hello hello my fellow pickle peeps this is diana randall bro here coming to you live from well we’re live we are alive not yet no uh but we’re here in prescott arizona uh happy to be here to talk to you about what’s going on in our crazy crazy crazy marcus so we had uh two years of covid driven craziness uh mostly seller’s market buyers struggling to get in homes homes going well over ask and bidding wars crazy times all that kind of stuff very stressful very hard particularly if you were a buyer yeah um really tough times for them out there really tough times so but nowadays things have changed things have changed cheers to that well before for our buyers that’s a good thing and for our buyers that’s a very good thing yeah things have changed it’s no longer a seller’s market it has become once again a buyer’s market uh here in prescott proper we’re not having dramatic 100 000 drops or anything major we’re having some slight price adjustments yeah we had um so this we’re recording this in july last time i ran the numbers were for june we have a seven percent price decrease which was basically taking back the appreciation that occurred since march which there really shouldn’t have been any right you know i’m not sure why i had appreciation things were starting to level in may but uh june kind of took back those two months so we’re we’re pretty much flat uh this year since march let’s say and i think that’s a a better way of understanding what’s going on here we don’t really have anything that’s going crazy right so we prescott takes a little bit to kind of catch up with the rest of the nation yeah i think that’s fair uh and so we’re starting to kind of catch up that’s why we’re seeing a little bit of that drop as randall indicated that’s why we’re seeing homes on the market a little bit longer which is fantastic for my buyers out there because you guys don’t have that intense pressure you don’t have to how do i gauge this how do i make my offer um it’s kind of nice to take a breather yes and catch up and move forward yeah absolutely the one thing that we we don’t like to see is that transaction volumes are down and what that means to us is that buyers are frozen in fear right you know there’s a lot of discussion about oh if there’s going to be a major crash and uh you know there’s a recession and inflation and all those things so we thought we’d spend a few minutes kind of unpacking that situation from our buyers perspective and give you our thoughts on your current situation and what you might think about in terms of moving forward that’s right so don’t freeze don’t freeze like us yeah you freeze you get run over by the headlights that’s what don’t freeze it happens all the time no reason to freeze no reason to panic yeah um this is actually still a good time to buy yes don’t worry about the uncertainty of the market historically if you go back in time anytime there’s high inflation or recession headed our way real estate real estate i appreciate well yes uh that was not the case in the in the crash of 2008 uh the real estate prices did go down considerably i think the average was about you know 25 30 percent which i’ll remind you is only one year’s worth of appreciation during covid we had two years of 30 appreciation uh so that would even if we had a crash we’d only be taking back one year of appreciation uh we don’t think that’s going to happen uh that’s just and we don’t see all right a couple things first of all uh the recession last time did not cause the uh real estate credit dropped the real estate crash caused the recession most recessions are not accompanied by a real estate crash because during recession and particularly inflation real estate does well yeah that’s sort of a hedge usually it holds steady it holds steady work yeah at that particular time too many loans to people who aren’t qualified easy for them to walk away which they did they did and then with the other the other issue was there was a glut of homes already on the market yeah and then when the recession you know when all that started people started walking away from their homes right and then there was even more homes on the market yes this is not the case right now not anymore anywhere not close to not anywhere close to the loans are harder to come by yeah there’s much harder to come so any buyers uh you know they’re well qualified yes uh it doesn’t make it so easy for them to walk that’s right that’s right and we have plenty of inventory right now yes the inventory is on its way up it is not uh as high as it was before covid but it’s on its way um it’s i think we’re in the 600s now uh basically that’s about half of what it used to be before covet right so we certainly don’t have a quad of homes we do not have a glitter homes we’re excited to see it growing a little bit yeah at one point it was down to 200 homes so uh we’re tickled now we have buyers come in we have plenty to show you more than we’ve had in the past two years so we’re delighted so historically aside from the housing market of uh 08 yeah uh you know real estate is always a solid investment yes if you wait let me ride this out three or four years you were going to pay more for your home yeah then if you come now well if you are in a situation like most of our buyers i call it bilateral what that means is you have a home that you’re going to sell and you’re going to buy a home here so and typically the way that works is you’re selling a more expensive home uh you’re buying a cheaper home here and you’re pocketing the difference okay i would call that the arbitrage the prescott arbitrage uh that still works it really doesn’t matter what the market is going to do as a buyer you may be thinking well i hate to buy now because if prices go down well i’ve overpaid for my house but if you’re also selling a house at the same time uh then you’re going to get 30 percent just say that it’s going to go down 30 just hypothetically so i buy a home and it goes down 30 percent i lost 30 percent well what you also lost is the extra 30 percent you would have had on the house that you’re selling the house that you’re selling is more money you’ve lost more money by waiting yeah right but in general if you’re buying and selling you don’t worry about market timing because you’re doing both at the same time now if you’re just buying or you’re just selling then you might want to be a little more hesitant about when you move but if you’re buying and selling if it’s a buyer’s market you’re going to do on the sell side if it uh you’re going to do well on the buy side if it’s a sell market that you do well on the sell side and the two will wash out yep so i would let your life situation dictate when you need to move and if we are going into a recession with some people think we are move you need to move typically people are in places like california colorado washington they’re paying higher taxes they are paying uh but the cost of living is higher gasoline that’s not going to go away that’s not going to go away all the way better particularly if you’re in retirement always better to move someplace where a living is wonderful and cheaper that’s right uh so that’s and a lot of people are concerned about uh interest rates uh here’s the thing historically interest rates are still amazingly low yeah still still not bad i mean you guys know out there yeah most of our clients are old enough they they they remember what high 12 14 18 some even 18 yeah eighteen percent i heard against the record not to worry about that and uh my my thing with that is come buy and then always you can always refinance when the interest rates will drop which they will eventually you can always change that and refinance and if you’re selling a big home and you’re down downsizing uh you’re going to be flush you’re not going to be borrowing much money anyway so interest rates aren’t as important to someone in that situation than say a first-time homebuyer who’s struggling to qualify so now is the time still regardless of our uncertain times um make your move be happy don’t get hung up don’t stay where you really feel like you’re in a stagnant area you’ve just had it and you want to move but this has thrown a kink in your plants don’t let it throw kinky yeah don’t get out there don’t get out there yeah don’t freeze yeah don’t freeze get out there make it happen it’s still a good time you will still get appreciation um even even if we’re headed towards a recession yeah real estate is still the best investment in uncertain times believe it or not yeah it really listen hit us up for a conversation if you want to talk about these kinds of issues more and how it affects your particular situation call the pickle and we’ll be glad to talk to you we’re happy to go yeah also too if you’re looking for information about the real estate market about prescott in general or just life just life just like we always like to talk yeah you can also go to people411.com which is our free information center whether you’re a buyer seller somewhere in between lots of free and wonderful pernicious information maybe not a good wordpress so please don’t freeze in fear move forward with your life do not get stuck in a rut because of all this crazy stuff we hear live your life life is short particularly if you’re in retirement age just that is so true hey we don’t know what’s going to happen get out enjoy life make your change we’re here to help you diana randall bro i’m the pickle lady come on to prescott we’d love to see you take care have a wonderful day bye