I'm one of those builders who likes to spend quite a bit of time in his furnished model home. So much, in fact, I office there on weekdays, and then give my sales staff one weekend off a month so I can cover the model for the weekend. I like keeping track of the vital signs of our market, and the best way to do that is to talk face to face with those out shopping for new homes.
Five...maybe even as recent as three years ago...I'd say the ratio of what we call "tire kickers" vs. true buyers in the market was maybe fifty-fifty on any given Saturday. Now, I'd say I have the "best" traffic I've seen in my decade as a builder. I say "best" because the ratio has changed dramatically to a majority of true buyers out looking. That proves to me there is definite demand alive and kicking in the market for new homes. That's the good side of it.
Where it gets challenging is that more recently in my conversations with these prospective buyers, I often hear comments like:
- "We're definitely in the market to buy. We're just not sure it's a good time right now."
- "I have a great job, I have good credit, and can afford a payment. I'm just hearing it's tough to get a loan right now."
- "We're ready to make the move, but we have a house to sell first, and we hear it's tough to sell right now and not lose money."
I'm reminded of the old notion that if you hear something enough, it will become true, even if it's really false. I'm certain that's what's happening here. We're on the verge of experiencing a self-fulfilling prophecy.
You see, we're in an age of new media. No longer is the local tv news or the community paper our only source of information. No longer is news delivered...or perhaps it's more that it's no longer consumed...in full stories. It's headlines and first-paragraphs. Consumers don't have the time or attention span to dig deep into the facts and think critically about what they're consuming. It's understandable. Heck, I'm even that way. Where that becomes dangerous is when it begins to shape our outlook on something, thus creating an alternative reality by which we form our opinions, build our world-view, and make life-affecting decisions upon. But hey, I'm just a builder, not a philosopher.
When it comes to the Oklahoma City Metro housing market, it seems people are reading the headlines of stories whose facts and projections are based on numbers and statistics from the major "bubble markets," which are now correcting in a big way, and just assuming that it all holds true here. In a sense, it's a "Real Estate Market Hypochondria," as I call it. Combine that with the all the stories of foreclosures due to sub-prime loans and ARM resets, and now we've definitely got a virus afoot.
There is where the fever is setting in.
It's time for some remedy, friends, and a good, healthy dose of the facts is just what the doctor ordered. Don't let the national media scare you out of the smartest move you can make.
I hope you'll take two of these and call me in the morning.
Note:This post was originally written for and published on the COHBA "Defy The Trends" blog.
Jeff Click a builder and owner of Jeff Click Homes, L.L.C. He currently serves as the First Vice President of COHBA, and will serve as President in 2009. He appears in the "Timing" video for DefyTheTrends.com.