Home Sales and Weather Both Cool, Is This an Early Start to the Winter Market?

It’s November already here in Marin and wow, where did the year go? One of my favorite Old Dominion songs has a line that goes, “Days will be long, but the years fly right on by.” Ain’t that the truth. One day your kids are celebrating their first birthday, the next they’re off to college. I heard about this “don’t blink” phenomenon many times, but didn’t really understand it, let alone believe it with my own eyes. Believe it, Ted, they really do grow up so quickly. Brooke is now a freshman at Cal Poly, Carson just 18 months to go at Redwood High. Luckily I had some foresight that all my friends and clients were telling the truth, so I was able to spend as much quality time with those two as I could. Thankfully. It’s a great life with kids and I am a better person today because of them. Proud parent doesn’t begin to touch how I feel most days. But I digress. This is a Marin real estate newsletter, yes, but people is what makes the world go ’round, as well as the housing market. Now to that.     

This month’s watchword: Change. Or make that Change? with a question mark as there’s some uncertainty if change is in the air. We’re seeing (or reading about) it nationwide as home sales slow and inventory finally starts to swell in middle America. Not so here in the Bay Area yet, or Marin specifically, but what happens in Iowa sometimes is a harbinger of what’s to come. The reasons are many and very familiar to those of us doing this for over three decades (I started when I was two): Rising interest rates, buyer fatigue, changing of the seasons, unrealistic sellers, you name it. All appear to be true today, with one new exception and perhaps our second watchword of the month: Zillow.  

Zillow is the largest online real estate company in the world and as you may know, they went offline and got into the home buying business back in April of 2018 with their Zillow Offers program. The plan was for Zillow to pay cash for the house, do any fix up needed, then spin off the house using a local agent. It didn’t go well, according to all published reports with the company losing an average of approx $100,000 on every house. Add this to a posted net loss of $162 million for 2020 and you wonder how this online enterprise can’t turn a profit on $3.339 billion in advertising revenue. Maybe it will be different for 2021 but if you didn’t make money on a real estate transaction in the last fifteen months–arguably the busiest in the history of most home resale markets–I doubt you’re going to make money at all.  

Where we go from here is unknown, though I do get asked all the time about the market in 2022. These are still unchartered waters for us as a county, a state and a nation, so much remains to be seen with the current or future pandemic(s) and how it impacts our work force which drives the economy, the stock market, interest rates and housing. I’ll stay in touch on my end with the housing. We’ll see how it goes with everything else. 

For now, that pretty much does it. Enjoy November and the rest of this year wherever you are and please stay safe. As always, thanks for reading.

Ted

415.377.5222

ted@gomarin.com

Filed under: Marin Real Estate Blog by Ted Strodder