Have you ever seen someone tease a dog? It doesn’t take long to turn a perfectly friendly pooch into a nasty, mean mongrel.
That’s exactly what happy-days-are-here-again real estate forecasts do to me. When I hear that home values are finally going to go up, I get all excited. I look up the value of my home online and figure out how far I have to go to get above water (I’m deeper underwater than the Titanic). Even though it will take years to restore any positive equity in my home, I’m feel excited. At last, things will be going in the right direction. I do a little happy dance and I take my wife Felicity out to dinner at IHOP to celebrate.
Then I wait. And wait. And wait some more, checking my home’s value every day, only to find out that it was a false alarm. Sales hadn’t turned out like the experts thought they would. Or a new bunch of foreclosures screwed things up. Or maybe they hadn’t calculated something quite right and got a little too optimistic. The first time this happened I was disappointed. The second time, I was annoyed. By the sixth time, I had turned into an attack dog, foaming at the mouth.
So you can imagine how I reacted when not one but two bona fide real estate experts announced the other day that THE RECOVERY HAS BEGUN. Oh boy. But in two weeks, my home value actually bumped up a little. In six weeks, it was up even more and by the end of two months, I was recouping lost ground for the first time in six years!
My real estate agent, Bea Meriwether, sent me a special edition of her newsletter. The local market was going crazy. All the big real estate investors were scrambling to snap up the remaining bargains before they disappeared. Home buyers who have been sitting on the fence for months were calling them in panic to find how much time they had to put a contract on something. “I almost feel sorry for them,” she said. This time I took Felicity to Red Lobster for Legendary Lobster Night and we had both had Key Lime pie for dessert.
What happened next is almost too sad to tell. The next morning, my home value stopped rising. For a week it didn’t budge. I figured the data was slow since there was so much action. When it finally moved, it was going the wrong way. I wanted to cry when it didn’t stop where it had started to rise weeks earlier but kept falling. The so-called experts, the same guys who were all happiness and glee, now wrung their hands over the “double dip” in home prices. Those guys can even make ice cream sound awful.
So Bea explained it all to me. Seems that when priced rose, lots of people who have been waiting for years to sell their houses listed them for sale. She called it “pent-up supply”. When there were too many houses for sale, sellers started cutting prices and the miniboom was over. I felt stunned and betrayed.
“Homer, have faith,” said Bea. “Someday soon all the demographic forces and the market forces will come together like a perfect storm. The next generation will wake up one morning and want to buy homes. We’ll look back at these times as a temporary blip in an upward slope. ”
Part of me truly wanted to believe her. However, another part of me felt like howling at the moon and looking for some living room furniture to shred.