State of the Market—March 2014

It was Sunday, March 30, and I was in Siberia, looking out onto the frigid tundra, desperately awaiting the arrival of spring. OK. Not really. Actually, I was in the Finger Lakes, but it might as well have been Russia—we received another six inches of snow and the skies were, once again, bleak and dreary. It’s no coincidence that I enjoyed a relaxing morning reading The New York Times and catching up on correspondence. After 24 years of selling real estate, I’ve become attuned to the vacillations of the market, both in the macro and in the immediate. Lousy weather portends a lackluster interest in anything other than a deep-seated desire to hibernate. And, on this day, buyers seemed to be hibernating.

The harsher reality is that, at the conclusion of the first quarter of the year 2014, sellers have more or less stayed indoors bracing themselves against the onslaught of the latest Polar Vortex. Well, at least in the Northeast. National statistics show that sales for existing homes are down 6.9% from a year ago February. However, when you begin to look more closely, the numbers tell a far more compelling story. Sales actually rose 5.9% in the West and 1.5% in the South. Sales fell a full 11.3% in the Northeast and 3.8% in the Midwest. To paraphrase James Carville, “It’s the weather, stupid.”

Personally, I take heart in these figures. Why? I’ve had a good start to the year, and the next few months look even more promising.

• Our sales, year to date, are 3% below where they were last year. We didn't see the 11.3% decrease in our business as so many of our colleagues did. Our strategy was simple: Knowing that, as a result of the federal government closing up shop this past October, sales fell somewhat dramatically in the final quarter of the year. However, it was a blip, a moment in time. By the end of November, consumer sentiment had strengthened and buyers were in the mood to purchase their new home. However, they first needed to roast a turkey, trim a tree and sing Auld Lang Syne. At the start of the new year, as prospective clients were approaching me to list their property for sale, I told them not to wait until the first of March. Instead, I encouraged them to list immediately. There was pent-up demand that needed to be released and they were going to be the vehicle by which that was going to happen. Sure enough, despite temperatures pleasing to Burgess Meredith and other Sphenisciformes, ravenous buyers were out there and anything that was decent was immediately scooped up; sellers, meanwhile, enjoyed quick sales at top dollar.

• The next few months should be quite lively. First of all, the fundamentals are there. Unemployment numbers are ticking downward, the stock market is trending upward, consumer confidence is in check and interest rates remain stable. If sales rose almost 6% in the temperate West but dropped 11% in the frigid Northeast, it's not too difficult to imagine what's going to happen locally once winter comes to an end. I'm speculating that, like the ancient Druids, with the arrival of spring, sun-worshipers, masked as home sellers, will emerge. Celebratory buyers, having survived the darkness, will once again have product to purchase. Deals will be consummated, a ram's horn will be sounded and great rejoicing will ensue.

In short, if you're a seller, get your house on the market—NOW! If you're a buyer, hang tight, the wait is almost over.