Tuesday, April 24, 2007

Needs and Wants, My Love...

Okay. This is a mouthful but I'm going to try and spit it out. It's a concept my Managing Broker Joe Pinto, refers to on occasion and in recent weeks, has played out more and more in my own daily routine of showing property in Chicago. The crux of the idea has to do with 'needs' vs. 'wants' in the present Real Estate market. The 'My Love' part, while fairly irrelevant from a Brokerage perspective, is the rational 'icing on the cupcake' from the Buyer's point of view. It's not all spreadsheets and basis points, you know. It's about balance in the marketplace.

Eventually, an overwhelming need to purchase a home just takes over, regardless of the market climate. Example: If I come home tonight and my wife informs me we are having triplets then guess what---I'm going to kick the bejezus out of the father. Ha ha. But really....we'd seriously be looking for a bigger place. Regardless of interest rates, regardless of 'bubbles,' irrespective of whether it's a Buyer's market, Seller's market, rain, sleet, snow, yadda-yadda, onomatopoeia...or whatever...we are sooo moving. And when we find the perfect place, even if I'm not being stabbed to death in a brutal negotiation by the Seller and the Listing Agent, we're paying the price. It's a need thing. Oh yeah, we're going to love it too. All five of us-- Then on holidays there are her parents and my parents; plus her son and his girlfriend; and my daughter and ...Wait!... I think I may have to move anyway.

By the same token, if the Witness Protection Program sends a Western Union saying I have to move to Fargo, North Dakota (also a Ha ha) by Tuesday then guess what again? When the Government calls...we run. Condo For Sale On Wolcott. Priced For Quick Sale. Dog and Cat Included. Best Offer Over Maximum Pain Level Accepted. Jimmy H is buried at...("I'm spilling my guts here to make this deal work....Would you care for a cool beverage? May I take back a second mortgage for you? ...There's a trap door in the basement and plenty of cash in the freezer...")

And again, again. It's a need thing. Want isn't part of this particular picture either. Want is a lesser force of Nature in Real Estate. It's an after dinner drink, that unnecessary 'must have' handbag in the Prada window. It's the Harley I never get. Need is the triplets I don't want but have to deal with.

Where I have seen a lot of want in the past year or so has been with Sellers with no sense of urgency or need to move in the first place. A lot of overpriced Listings on the market. A lot of 'testing' the price points to "see what happens." A lot of inventory. A lot of want. Not a lot of Buyers. But as my Broker is quick to add, "The demand for housing doesn't go away. It just gets pent up." And of course, I concur.

The way I see it, one may be able to squeeze an extra year out of a beat up Bimmer or 'pass' on a new pair of Ferragamos for one more season but eventually 'need,' ('want's' bigger brother and a greater force of Nature), is going to step in and take over the situation. Then, in due time, a funny turn of events begins to occur.

Some of the inventory, the best of the best, gets scooped up quickly. Another portion falls off the market permanently as people stay put. ('Test' results are in. No 'social promotion' this year for the house with the bad kitchen and beat to hell bathrooms.) Buyers jockey for the next 'best in show' Condo, and Multiple Offers become more commonplace. Property starts selling with quicker Market Time and people start surfing the Real Estate websites at work and attending Open Houses on Sundays and Saturdays. The inventory 'back-up' calves like a glacier so life can move forward as the housing cycle regains its momentum until the next global housing cooling scare. The circle will not be unbroken and when it does, there's an Inspection credit at Closing for the Buyer.

Need and Want I submit to you dear readers, form this elliptical cycle of Housing. It will most always be this way in a free enterprise system, I believe. Need is the dinner, the meat and 'taters. Want is the dessert, the creme de la creme brulee. And Love....love is never having to say "I lost you... in a multiple offer."

Geno Petro

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