Boston Real Estate

I have been reading the Boston real estate blogs this morning and I was struck by the wishful thinking demonstrated by real estate agents. This reminds me of when I was a stock trader and the NasDaq was at 2800 in 2001 and everyone was so busy explaining why that was the bottom while it proceeded to go to 1100 over the next year.

A lesson learned the hard way you can be sure. I wanted 2800 to be the bottom so I invested. Oops!

Market bottoms are indeed hard to call. In the stock market it seems that we put a bottom in when everyone has sold and given up. Once everyone has sold there are only buyers available anyway. Bottoms seem to come when everyone gives up on finding the bottom.

The truth is most real estate people are going to predict what they want to happen or what they wish would happen so they grab some data that may support a guess about the market direction.

I’ve had enough of that hubris, or call it posturing.

It would seem that the first wave of Boston real estate buyers coming in the spring will be very busy and maybe even set off a bit of panic buying, but the activity is being faked by the tax break incentive. I think this will be sold into by sellers who have been wanting to sell. This is why I have been saying that the 8K goes to the sellers in the end as they just jack up the price inside the flurry of demand when the deadline looms.

After the deadline has passed, we will see if we are running low on sellers. Once that happens, the demand is satisfied, the market has a chance to stabilize and move higher. This can take longer than anyone predicts and there is a possibility of the market languishing after the tax credit has expired and we could move lower in prices as well as transactions. This could go on for years but I’ve got to believe that the real estate market (barring any exogenous events like terrorism) will start to strengthen in 2010.

It is a market though so who knows?

I for one have resolved to stop guessing as its all posturing and ego-tripping. In a market anything can happen and usually what actually happens is the thing that makes the largest number of market participants wrong.
Written by Jeff Persons ABR 617-512-3443

Check out what they are saying on these blogs:
http://blog.redfin.com/
http://www.urbancartography.com/
http://bostonrealestatemaven.wordpress.com/
http://bostonrealestateblog.bushari.com/

More Reading by Jeff Persons:
What is the Stock Market Telling Us About the Real Estate Market?
5 Clues That Your Boston Real Estate Buyers Agent is a Sellers Agent in a Brilliant Disguise.
It Doesn’t Surprise Me That Boston Real Estate Prices Are Holding firm
Buying Boston Real Estate Without a Buyers Agent is Like Going Into Court Without An Attorney