Last month I reported a 60% pending percentage in North Tacoma (127 pending sales / 210 active listings). I boldly called for that to improve once the kids were back in school and buyers refocused. Not much changed. It is at 55%. That’s not a bad market. It is balanced, but I am left wondering; who were these deranged, bloodthirsty buyers roaming our streets until mid-July just waiting to pounce on and devour new listings? Where are they now? To find out, I sought one out. I interviewed an actual client, Erik, who hasn’t called to view a house since before this mysterious, rapid normalizing in mid-July. Perhaps Erik is representative of the greater deranged bloodthirsty community.
TH: Thanks for agreeing to this, Erik. Is the market improving, staying the same, or improving?
EO: Did you say improving, staying the same, or improving?
TH: Yes. Multiple choice.
EO: Okay, I am feeling more comfortable now that when I find the house we want I will be able to sell our current house. So, improving, which was 66% of your possible answers.
TH: Sounds like you still want to move. Why have you not been looking at homes lately?
EO: We haven’t seen any good ones on the computer.
TH: Are you seeing another Realtor?
EO: I wish. (uncomfortable laughter) Why would you ask that? My parents introduced me to one and she tried to get me to sign up for her program.
TH: Yes, sign up for the program, drink the Kool-aid. How is your health?
EO: My health? Very good. I drink less and go to hot yoga. If I have a beer, I wake up at 6 am and my back hurts. I sleep a lot better if I don’t drink.
TH: Wow, that was my next question. Are you sleeping?
EO: Yes, better, especially if I don’t drink wine, because of the tannins or something.
TH: No, I mean are you sleeping right now?
EO: I hope not. I am driving.
TH: Are you using a hands-free device?
EO: Yes. Well, sort of. I have the volume turned up high and I’m holding the phone away from my head where a cop wouldn’t see it. So that’s kind of hands free.
TH: I’m wrapping this up. Are interest rates headed up or down?
EO: I assume residential rates are heading up. They can’t really go lower. I did hear on the radio about Larry Summers taking himself out of the running for Fed chair and that quantitative easing would continue. Do you think they are headed up?
TH: I ask the questions. Any other comments about the real estate market?
EO: I feel like I am in pretty good hands. We know what we want but we are dragging our feet because of the home we have—we feel like we really lucked out with that.
TH: And who sold you that home?
EO: You did.
TH: Thank you for your time.
Erik is right about being in good hands. He is also right about quantitative easing, a program whereby the Fed buys bonds every month in an effort to keep interest rates low and stimulate the economy. Speculation has grown over the summer as to when the Fed would begin to phase out the program. The Fed held its annual meeting this week in Jackson Hole, WY (which coincidentally has great hiking trails and places to eat with cutesy names that appeal to many Federal Reserve types). The market had anticipated a tapering would begin immediately. The Fed, tipsy from thin mountain air, shocked everyone by stating that the program would continue, with no set end date. The market response was the biggest one day improvement in mortgage bonds since August 2011. That bodes well for interest rates. Thanks to my friend George for buying me a cup coffee at Valhalla this morning and arming me with this technical jargon that lends an air of credibility and gives people something to skim through.