Tag: mortgage

Individual Value Trumps Group Opinion

image displaying individuality

 

When my friend was in college, he minored in English and enrolled in a course called “Feminist Literature” (don’t worry, we’re not about to get political, I promise), which was taught by a very outspoken and intelligent professor who polarized the small university community. On the first day of class, the professor introduced herself and welcomed everyone to the new semester, and then she handed out the reading list for the course. As the professor was giving an overview of what she wanted the students to take away from her course, my friend started scanning the reading list. The authors and their subjects didn’t surprise him in the least – he went into this happily and with eyes wide open. What made him do a double-take, though, was the sheer number of books he and the rest of the class were going to be required to read fully and be prepared to discuss at length and cover in exams. At that moment, he knew he was going to need to make a beeline to the administration building after class and withdraw from the course – there was no way he would be able to pass all his other courses if he devoted the time needed in this one.

The professor then asked that they go around the room and have everyone introduce themselves and tell the class why they chose to take this course. She started on the opposite side of the room, so it gave my friend time to get a feel for his classmates and see if there was a slim chance that he could convince himself to stick it out. The class was composed of about thirty students with four of them (including my friend) being male. Almost every single person who introduced her or himself gave a very (I’m using his term) “brown nose” answer to why they chose to take this course – everyone was clearly in love with this professor and the idea that they were taking this course to “rebel” against the conservative nature that pervaded the small university he was attending. The funny thing was he also noticed that each time a student sort of professed her/his love for the professor’s daring nature, the professor had a look on her face that could be interpreted as stoically pleased or slightly perturbed.

At long last, it fell to my friend to introduce himself and tell the class why he had chosen to take this course. Still not quite sure what the professor’s “look” was telling him, he decided to gamble by just introducing himself and then going silent. As the next student was eager to introduce herself and was about to launch into her story, the professor stopped her and asked why my friend was taking this course. He smiled and took his time to look around the room and make eye contact with as many of the female students as he could and then said, “Because I’m looking for dates.” Amid a few groans and some stifled laughter, he looked up at the professor and noticed that his gamble paid off: she smiled and openly laughed – she valued a sense of humor over blind servitude.

He had decided to withdraw from the class (the “brown nose” classmates clinched it for him), and he knew that in the future he might cross paths again with that professor in another course. He figured if the professor remembered him, and remembered him positively, that would bode well for him. Even if she hadn’t found it funny, he figured it would be a lot easier to reason and work things out with one person than a group of them. (And he already had a girlfriend who would become his wife, so dates weren’t something he needed.)

In the real estate/mortgage world, it’s all about focusing on the single person rather than the group. If you’re someone who is looking to purchase a home, it’s important to focus on yourself (and your goal) by foregoing an occasional night out at the bar with the group so you can save for a down payment – the group won’t be buying the house for you. For use on the business side of things, it’s a sad day when you ask someone if they can name the agent and the lender who helped them buy their first house, and their response is, “I remember he/she was with X Company, but I couldn’t tell you his/her name.” When that happens to you, you’ve been lumped into a sad group, and that group isn’t going to help you get new business.

Perspective: the Key to Prosperity

Keep calm and carry on sign

 

Depending on which news channel you watch or which website you follow, the economy and the world are either going to Hell in a hand basket or we’re exactly nine seconds away from entering Nirvana. We could go into the reasons for the differing perspectives, but since you’re reading this column, the only perspective that REALLY matters is mine, right? I say that with my tongue firmly planted in my cheek, of course, but I would like to take a moment and just point out a few things that are devoid of passions and politics that should help us all gain a little non-partisan perspective about the housing market.

I know I’ve written about this before, but it bears repeating: we are not approaching a bubble. “That’s your opinion, you filthy animal,” some of you may say, but let me give you some data to let you decide for yourself (data about it not being opinion – I can’t do anything, really, to dissuade you from thinking I’m a filthy animal). Using the Tucson, AZ, housing market as my data set, let’s take a look at a couple of things, and you can decide for yourself if my bubble comment is correct (and I hope you reconsider your opinion of my personal hygiene).

In April of 2007 at the height of the “Bubble Era” (I just made up that name), there were 10,387 houses for sale – that was the peak for the Tucson market, and the numbers started to decline from that point.  In February of this year, the number of houses for sale was only 3,293.

Granted, those numbers are going to vary from market to market, and there will be exceptions, but I believe this proves the rule: we’re not even close to the numbers that we were seeing back in the Bubble Era.

Let me share a couple more pieces of information to round out this discussion on the state of the housing market – I’ll use Tucson again as my point of reference. In June of 2007 (the peak), the median home price was $225,000, average sales price was $293,443. In February of this year, the median home price was $207,000, and the average sales price was $249,095. For further perspective: the median home price in February of 2015 and 2016 were $168,900 and $194,000, respectively; the average sales price in February of 2015 and 2016 were $209,527 and $229,703, respectively.

While my stating the obvious may, perhaps, cause a collective “duh” to be uttered, I’ll do so anyway: home values are growing at a healthy but calm pace. Coupling that with the fact we’re not close to a bubble forming, you have reason to be happy if you’re a current homeowner and optimistic that a home is a good, solid investment if you’re a prospective buyer. I’m reminded of something a friend’s dad used to say each time they were on a road trip and my friend would ask, “Are we there yet?”. His dad would always reply, “No, son. We are always HERE.” Stop the hand wringing and embrace the now. The future is only the result of today.

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