Fear and Desire and the Housing Market
July 5, 2010
Whether it is an economic boom or an economic bust, fear and desire are the human emotions that seem to make or break a market. Fear of being left out drove the housing boom; fear of a further decline in real estate values is driving potential buyers to hold back. Desire to for a certain quality of life, to choose one's neighborhood, and to put down roots fuels the decision to purchase a home. I In a recent Business Week Magazine, I read an article that was titled "Home Bidding Wars are Back in San Francisco." Both the volume and prices of sales in San Francisco have risen dramatically this year. What caught my attention were the interviews with two recent home buyers who paid significantly above the asking price in order to be successful in purchasing the property that they desired. Imagine paying $875,000 for a 1400 square foot, three bedroom house!
According to one economist, a limited supply, an attractive climate, an innovative economy and a high quality of life are the ingredients that are pushing demand in San Francisco.
I would suggest that we examine our own Inland Empire. We have a fairly limited inventory of unsold properties. We have an attractive climate. I have tried to emphasize the many cultural opportunities that we have - all of which contribute to a high quality of life. We have both private and public institutions of higher learning. Is the innovative economy the one ingredient that we lack? Or have we let fear hold us back?
It will be interesting to see which emotion leads the way in the second half of 2010.
Whether it is an economic boom or an economic bust, fear and desire are the human emotions that seem to make or break a market. Fear of being left out drove the housing boom; fear of a further decline in real estate values is driving potential buyers to hold back. Desire to for a certain quality of life, to choose one's neighborhood, and to put down roots fuels the decision to purchase a home. I In a recent Business Week Magazine, I read an article that was titled "Home Bidding Wars are Back in San Francisco." Both the volume and prices of sales in San Francisco have risen dramatically this year. What caught my attention were the interviews with two recent home buyers who paid significantly above the asking price in order to be successful in purchasing the property that they desired. Imagine paying $875,000 for a 1400 square foot, three bedroom house!
According to one economist, a limited supply, an attractive climate, an innovative economy and a high quality of life are the ingredients that are pushing demand in San Francisco.
I would suggest that we examine our own Inland Empire. We have a fairly limited inventory of unsold properties. We have an attractive climate. I have tried to emphasize the many cultural opportunities that we have - all of which contribute to a high quality of life. We have both private and public institutions of higher learning. Is the innovative economy the one ingredient that we lack? Or have we let fear hold us back?
It will be interesting to see which emotion leads the way in the second half of 2010.
posted by shirley harry at 8:04 AM
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