
Picture dancing munchkins - no, not the kind you get at Dunkin' Donuts... the kind of freaky type from The Wizard of Oz.
I just finished reading the most recent article from SF Gate's "Surreal Estate" series and all I can say is that I am STOKED!!! This week's entry is entitled "Out, Out Damn Spot" a la Lady Macbeth and is the first solid indication I've read that the
San Francisco Real Estate Boom is officially over.
Now, this isn't "new news" or anything. A smattering of articles have been cautiously hedging and edging and tip toeing around this subject for months. Perhaps it's been the result of a rare moment of journalistic integrity, wherein the fourth estate has decided not to hurl the local realty market into an abominable tailspin by openly stating what has been easily observable for months - the party's over for the flippers and unwise investors. On the other hand, maybe the lack of bold pronouncements of realty doom and gloom has been spurred on by the fact that local journalists are, themselves, property owners with much to lose in a market crash. Either way, the silence has been odd in the same way that you wonder why nobody's mentioning the elephant in the living room.
Mr. Barbellina & I have been going regularly to open houses for the past year or so, in search of a seemingly modest piece of property - a 2 bedroom condo in the city, outside of bullet range from the projects, with parking that's near a dog park. This has proven to be a highly frustrating endeavor that has been mostly depressing. In our pursuit, we've even come to consider buying into a
Tenancy In Common. One thing we haven't budged on, however, is our rule about not entertaining the idea of purchasing property that was involved in an
Ellis Act Eviction, which is commonly employed as a method of evicting the elderly and vulnerable in order to flip a property for gross profit. Mr. B and I just believe that, when the Ellis Act is abused (as it frequently is), it is unconscionable and this would be the equivalent, to us, of investing our money in the tobacco industry... sure, you can make money, but at what spiritual / karmic cost?
We are very fortunate to have decent rent where we live and a fantastic apartment, so even though we live in a one bedroom that will be somewhat cramped with the baby's arrival, it will be possible to stick it out for a while where we are. It's a blessing that we don't HAVE to move immediately, which takes a lot of pressure off, but all the same... It has been depressing even just
looking at the market. It's disheartening to analyze your financial situation, go through the first flush of "wow, we can really afford THAT much!?!??! We are SO together" and then discover that what you would normally percieve as a veritable embarassment of riches is actually considered, in this market, to be a scoffable pittance that you should feel
lucky if it managed to wrangle you a junior studio in a neighborhood where you'd have to kick the used needles and chipped vials aside to clear the doorway entrance every day.
Last year, when we began going to open houses, we were naive enough to presume that a property that was LISTED in our price range would actually SELL in that range. We quickly learned that this was not the case... sleazy realtors would intentionally list properties for easily $30,000 below their expected range in the hopes of sparking a bidding war. Listing descriptions would include snotty little notes from the agents about how "offers will be accepted at noon next Tuesday (after the place would be on the market for a week) and will close accepting offers by the end of business Wednesday." The tone and attitude was that you'd better belly up and fast with a fat check in hand and pray that your offer would be accepted. Adding insult to injury, many realtors made it a practice to openly mention that they would entertain "pre-emptive offers" before the accepted bid date wherein the buyer could put in a bid so ridiculously over the asking price that they could hope the seller would jump on it without having to go into a bidding war with other interested parties.
After a few quick spins on this dizzying dance floor (you swiftly get caught up in it and find yourself making mental compromises like "we don't
need a bathroom large enough to sit on the toilet without having your knees scrape the wall"), Mr. Barbellina and I took a deep step back and have become veritable wallflowers at the prom... We're still in attendance... but we're mostly observing for now. We both knew this market couldn't continue forever, and even if the prices don't end up dropping, at the very least, we'd prefer to be buying our first home in a sales environment that allows for contemplation and discussion and even, possibly, a little give and take between the buyer and seller... We don't want to feel pushed into handing over a down payment that is the size of some small nations' entire GDP on a home that we're not completely satisfied with.
Now, however, the moment is over... In the past few months, as we've gone to open houses, the crush of potential buyers has thinned significantly. Showing agents are actually... dare I say it... affable and friendly... hell, even
outgoing. They no longer preside over their showing with the casual unsouciance of a 20-something retail whore working the counter at Diesel Jeans, wherein, despite their lack of education and the fact that they're making minimum wage, the clerks behave as though
you should feel fortunate to shell out $150+ for some slabs of denim and they'll get to giving you some gum-snapping, black-nail-polish-blowing "service" when they're good and ready.
In addition to the showing agents' newfound sparkle for treating potential buyers as, well...
humans, the listing descriptions now include such encouraging phrases as "recently reduced" and "new, lower price," and only the most horribly out-of-touch realtors will mention anything about offers being accepted between "X" and "Y," as though the agents are so harried with their precious time that you'd better accomodate their schedule to offer up your life savings as a meager gesture to the realty gods. Most encouraging of all, the properties that we're looking at these days which are listed in our buying range are actually probably going to sell for around what they're listed at AND they're actually places we'd consider living in...
Upon reading today's Surreal Estate, I was just so encouraged because within the article, Carol Lloyd refers to the market as being a "buyer's market" in an almost casual, it's-always-been-this-way tone. No, there hasn't been a loud pronouncement that I've seen that the boom is over, and perhaps that's for the best... It benefits nobody within our economy to have prices plummet in freefall overnight. However, those of us who are seeking to get into the market without employing such risky propositions as reverse mortgages and interest-only loans, can finally see a light at the end of the tunnel.
All hail!!! Ding Dong, the witch is dead and we may someday soon be able to afford a home without tremendous risk!!!