I received my undergraduate degree in Political Science from UCSD back in the late 1980’s. Ever since then I’ve lived through several brutal economic cycles. The first Bush recession in the early 1990’s was bad, and the first I experienced as an independent adult. The day my manager at a hotel where I was working on skid row told me he had no more hours for me, I was able to tell him that was fine as I had just accepted a job at the Palace Hotel. I knew the axe was going to fall, so I started relentlessly beating the bushes for my next job. I was 1 of only 12 applicants to be hired out of 500 who applied to work at the Palace front desk for their grand reopening in 1991. I worked my way into management at the Palace and eventually left for MBA studies in Internet Marketing at SFSU, which I finally completed in 2002. That was right about the time of the dot.com implosion, when internet companies were downsizing, not hiring. I kept working my job as a project and database manager with a local event management company, which had gotten me through school. Finally in transitory fashion, I left to be a manager at a Target store for about 8 months until I quit to become a Realtor in 2004.
Back in 2004 the housing market was booming, but by the end of 2005 the condo market had just begun to erode. That’s when I sold my condo at the peak of the market, because I could see things were going to get bad. It took 17 years in those HOA for prices to recover and my own unit went down 54% in the 3 years after I sold! The market began a slow descent initially, and it picked up speed until things finally crashed into a global financial crisis and the Great Recession a few years later. The Bush recession, the dot.com bust, and the Great Recession, I’ve been through a few seismically bad economic patches and it seems like we are rapidly diving into another. Maybe I’m wrong and I hope I am.
What I’ve learned through all this is that you have to make BOLD moves and take care of yourself, your family and your future first and foremost. In baseball speak, you need to stay close to the bag when taking a lead while the pitcher gets ready to throw. You don’t want to get caught unaware and picked off! In baseball that’s just an out. In life people lose entire fortunes when they ignore what’s happening around them. In my time as a Realtor, I have helped a lot of people who have lost everything and become roadkill under the unforgiving wheels of foreclosure. I had my eye on a place in 2007 that I really wanted to buy and my mortgage broker had me approved for a stated income loan. All I had to do was sign a document saying I made ‘X’ amount of money to be approved for the house. The only problem was, I didn’t make X. I made X-Y and I fortunately decided not to buy. Had I bought that house, like so many other people I definitely would have lost it to foreclosure and you probably wouldn’t be reading this today. I might be back at Target!
Are you asking yourself, what is the point of this blog? The point I’m trying to make is that buying and selling real estate is always a very big decision. In light of the ‘Tarrific’ tremors that are now on the verge of upending economies, alienating allies, devaluing the dollar and America’s place as the world’s currency, the decision to buy and sell real estate is even more critical. Things have become entirely unpredictable. Markets do not like unpredictable. Businesses like to be able to cap ex plan and price accordingly. That’s impossible when you don’t know how much your goods are going to cost, what will labor cost, and whether or not the demand for your products will take a hit because you are suddenly looked down upon as an American business.
Whatever is happening in the overall American economy, don’t think that the housing market exists in a vacuum. Already I’ve been hearing about buyers who will be holding off this spring due to the economic uncertainty. Interest rates are now in the high 6's as our treasuries have been devalued, and that’s led to more buyers hitting the sidelines. If you are thinking about selling, now is the time even as the ranks of buyers thins. If you are thinking about buying, make sure you can afford it. Take care of yourself and your family, and in the words of Lee Child’s Reacher, “Hope for the best, plan for the worst.”