This morning, a beautiful gift basket was delivered to our door. It is actually a gift basket for one of our clients who just closed escrow on her new home. Imagine the audacity of purchasing a home in this market! What was she thinking? Didn’t she heed the warnings of all of the passionate folks talking ad nauseum about the real estate bubble? Does she know that this decision to purchase brought her one step closer to financial ruin? For shame. The gift basket, by the way, is beautiful. The basket lady does a fabulous job. This time last year, she was very busy. Unfortunately, as the market has slowed, so have the orders.
Now, I am bracing myself for a dozen comments to this concering gift baskets. Funny how that goes. Back in September, I wrote a nice little piece thanking an agent/mortgage broker for a smooth transaction. The 23 resulting comments dealt with option ARM financing. Earlier this month, Steve had a moment of reflection in which he was enjoying the San Diego weather which generated 32 comments on the impending crash of the real estate market. And in November, I wrote about anticipated December market activity, which of course resulted in 12 comments all pertaining to… rabbits.
I recently wrote a post for the Bloodhound which I’ll call my group therapy. I will admit that one catalyst for my post was a rather hateful little remark (personal attack) that was made here, but the article itself was intended to suggest that not all (or even most) real estate decisions are based solely on the financial bottom line but on more personal considerations. I wrote that home buyers and sellers define “return on investment” in different ways, and it is not always defined in terms of dollars. Case in point, in the past month Steve and I have seen our clients make their decisions to buy or sell based on divorce, need to accommodate a growing family, downsizing for impending retirement, downsizing in response to the last child leaving the nest, relocation both to and from San Diego, and simply a desire to purchase a larger home. In not one of these cases did the state of the market drive these decisions, nor was it a major consideration.
What my remarks were really about was this: Real estate is personal. Our business involves real people making real, emotional decisions. While many choose to see real estate as a purely financial investment (and this is obviously true of those that hold income property as a part of their investment portfolio), real estate to the masses represents a home, a life style, a life, and there is nothing impersonal about this. Be the market good or bad, people will continue to buy and sell for a variety of reasons and, while these reasons may not seem financially sound to the bubble bathers who do indeed seem to revel in the bad news, they are absolutely valid from the personal perspectives of my clients.
So, of course, my post quickly morphed into a perceived public service announcement promoting homeownership, with the comment thread evolving yet again into a realtor-bashing party in which those “passionate” about the market changes we are seeing questioned the ethics of agents and mortgage brokers, the intelligence of anyone who would purchase today, and even Jeff Brown’s earnings.
Which brings me to the basket lady. In the Bloodhound post, I stated the following (perhaps, a little too testy) in reference to the bubble babies:
I am finding this recent proliferation of to-hell-in-a-hand-basket reporting nothing more than childish, ambulance chasing tripe of which I have grown weary. Get a hobby, read a book, play with your children, but stop taking perverse pleasure in the misfortune of others. Grow up and stop blaming your personal unrest on NAR, economists, real estate agents, mortgage lending practices and everything and everybody in between.
Now, I admit that was a little harsh, but I really am fed up with the venomous animosity being spouted by many against an entire industry, the energy they spend on espousing their sense of impending industry doom, and the seeming thrill they derive from the same.
One commenter wrote:
Your industry has hyped this market and it has worked for your personal benefit. You should not feel offended when someone makes a comment against the industry that you are a part of.
For the record, I am not offended, but I do take it personally. I have no issues with those who are more bearish than I on the future of home prices or even those that despise real estate agents. I appreciate and respect their opinions, but would appreciate more thoughtful balance in the message and more compassion in the delivery. The clients I work with are not poor saps that have been swindled by an industry run amok, and they are not misinformed little lambs heading straight for the slaughter due to industry hype. They are real people making real decisions regarding a very real need – Housing. And to those that revel in the down market and use the opportunity to portray industry professionals as overfed, money grubbers who are finally getting their just desserts, loathe agents and mortgage brokers if you must, but don’t detest an entire industry. Take a moment to consider the basket lady. I feel sorry for her. While we are at it, let’s consider the printer who prints our property flyers, the carpet cleaner who shampoos the rugs prior to closing, the handyman who performs the buyer’s requested repairs, all of the many, many others who provide support services to the industry, and, of course, the three past clients of mine who called this week about buying and selling due to divorce. For them, real estate is very personal.
ABOUT THE AUTHOR Kris Berg is Co-Owner and Designated Broker of San Diego Castles Realty. If not-so static web sites are your thing, go here at once where you will find loads of real estate information including homes for sale, market trends, floor plans and more. Kris's hobbies include fencing and spot welding. She likes kittens. 
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{ 13 comments… read them below or add one }
This coming year my newish bride and I will endeavor to relocate from my bachelor pad. Whatever home we end up buying will be the one that made both of us smile. Though to a tiny extent the decision will consider objective points, our emotions will have the ultimate veto.
I remember my dad telling me about the last house he ever owned. He bought it because the agent figured out how much the backyard meant to him. As Dad was mildly criticizing various aspects, the agent just kept counting the number of trees and rose bushes there were. Dad didn’t have a chance.
You’ve nailed another one Kris.
Well I guess I can respond to this post
I don’t think anyone disagrees that you should buy a place where you want to live, but there are other issues in today’s market that really should be addressed. Recently the newspaper featured an article about a young lady who purchased in 2005 because she had just acquired a contract with one of the local biotech companies. Now, she is in a situation where her contract is almost over, and she wants to move when it’s done. The problem is that her condo has gone down in quite a bit in value (she purchased in UTC, the massive conversions have put a lot of pressure on the prices for condos there, not to mention overall market forces). So, she can’t afford to sell it, and, once she loses her job, she can’t afford to keep it. She can’t rent it for even half of the holding fees.
This is just an anecdotal example of one person who purchased because they loved it, but didn’t look at the future for herself, plan on the unexpected, or examine the fundamentals of real estate.
Jeff, in your case, maybe you are just wealthy enough that you really don’t care if price changes. I can’t say that I’m personally a very practical person. I buy way too many expensive gadgets, and I drive a mercedes. Thing is, I did buy everything (including the car) cash. Just consider that if someone is buying 100% financed (huge percentage of California buyers) that they need to consider market forces in their equation along with emotion. (obviously the future is up for debate on that) Otherwise you can end up stuck in 2-3 years when things change, and your place has gone down.
Wow! A great post on many fronts. 1) A home is a home because of its utility, 2) those that slam our industry are just ignorant and think we just collect a check, and 3) my 2007 resolution is to keep the basket lady in business. Kris, great perspective, keep em’ comin’.
NorthernColoradoRealEstateBlog.com
Jeff – I love that story about your Dad, and I love that you (being of the impersonal, investor ilk) can relate to my touchy-feely argument. When you leave the bachelor pad, what will do you will all of the lava lamps and Grateful Dead posters?
Doug – Thanks for chiming in and for calling my attention to your blog.
Sven – Thanks for responding with grace. Your horror story is not an isolated one, I am afraid; I will give you that much. Absent absolute certainty of the future, if we live our lives paralized by fear, however, we could look back with different regrets – Such as not having made that purchase.
Basket Lady (or, shall we call you “Donna”?) – Thank you for the email this morning. Who knew you read our blog? Glad you enjoyed the testimonial, and here is the promised plug: http://WelcomeHomeGiftBaskets.net.
I told you we would end up talking about gift baskets!
I appreciate your comments.
One of the hurdles I’ve had to get over going along as been my relationship to the bubblers. Fortunately for me I’m enough of an ass#$#@ so that if they get on my nerves enough, I just engineer them off my site — but I noticed that poor Steve got an earful of one of my ex bubbler nemeses after I did that.
Sorry about that.
Maybe it’s just you’re in San Diego and I’m in Sacramento, and as we all know, nerds fly south in the winter.
Oh wait, no, that would be “birds”.
Yes, I suspect that after all is said and done the fact that some people don’t like me is no big whoop — let’s face it, I’m a professional salesman, and no one likes a professional salesman (except someone with a need to buy or sell, of course — then like cops on a crime scene we suddenly become popular). But like you I sympathize on behalf of my clients when the bubblers erroneously portray them as dupes of the big bad real estate machine rather than as hairless great apes like me who do better with shelter than without it.
I try to keep both the bubblers and about 80% of my colleagues as well in perspective. Perhaps the best quote I’ve seen about the level of discourse on the Internet comes from Steven Lower’s pseudoscience page (http://www.chem1.com/acad/sci/pseudosci.html):
“It’s been my policy to view the Internet not as an ‘information highway,’ but as an electronic asylum filled with babbling loonies.” —Mike Royko
That said, I do think you and Steve come up with some really good stuff. Maybe some time when you’re not too busy you could come by my Sacramento blog and pretend to like me? I could use some imaginary friends.
Another babbling loonie,
John
Kris,
Having read a few of the recent threads/posts it’s clear to me that Sven is NOT suggesting that every homebuyer should be planning for “absolute certainty” with respect to their economic situation vis-a-vis purchasing a home. His point, I believe, is that given the home prices of the past few years and the types of mortgages (e.g., option arms) that were required in order to make the properties “affordable” (at the time, of course), that MANY (dare I say most?) buyers had no business purchasing the home they chose to purchase using even aggressive assumptions regarding their future earnings and conservative assumptions regarding the possibility of a rising mortgage payment. We’re not talking about certainty here – we’re talking about being moderately objective regarding the normal vicissitudes of life and how such issues might affect one’s ability to pay a mortgage in a rising rate environment. If “certainty” were an issue, no one would ever buy a house – I’m not picking up the “paralyzed with fear” vibe from Sven’s posts; merely that people should be somewhat rational and level-headed about making a big financial decision such as buying a home – recently, in aggregate, people have not exercised such rationality… and they will pay for it… as they should. That’s how markets work. I find it humorous that you take Sven’s worldview of “Hey, prices are crazy and you should be really careful out there” (to sum it up) and interpret it as, “Oh my, one should never ever make a purchase unless they are absolutely CERTAIN that everything will work out alright.” In so doing, you just create a straw man that didn’t exist in the first place in order to pretend to knock it down to further your own worldview. Certainly you can do better than that.
Kris – I strongly represent that remark!
Happy New Year kris! Bolts secure home-field advantage throughout playoffs and My Giants got in by the hair on their chinny chin chin!
Vince, Happy New Year to you as well. Go Bolts! Now for the big, free-enterprise question. Do I let Steve go to the Playoffs or do I sell his tickets on Ebay?
Kris,please dont feel sorry for me,(your gift basket lady). I hold both you and Steve in the highest of regards! You have been such a wonderful mentor to me this year and I only wish to become as sucuessful as YOU have shown me that I can be.I am very PROUD to know most of the agents in San Diego and I havent ment one that is greedy.As to the part about haveing clients who are selling because of divorce-”hog-wash!” I walked away from a long marriage (took
nothing) and now own 2houses on my own. You are only providing a service not stealing.What your client does with his money is HIS choice and if he chooses to buy or sell house’s then I say more power to him! Sincerly Donna
Happy New Year, Donna.
No sweat, I’ll take a rain check on that. I always have plenty of low sodium mineral water and other nutritious foods in the house. But you already know that.
John,
You’re funny, and I didn’t mean to ignore you! I have been a little unattentive to blogging due to the holidays. Speed reading failed me, and I would be delighted to stop in for a visit!