Our Real Estate Paradox

As we exit the insanity of the COVID real estate boom, sanity will begin its new reign. Like most transitions, we are going to see some fits and starts, but in the end, the market will correct itself.

One of the phenomena that always plays out in any transition is overreaction to the ‘information’ at hand. I often marvel at some of the so-called information that people will react to. Hearing about national real estate trends in the media does not, and should not, instantly translate to what is happening in your neighborhood. Heck, Miami stats are likely different than what is truly happening in Pinecrest.

It is only when you are able to clear the noise and static that you can see the true message within. Hearing that there are fewer buyers nowadays does not mean there is enough homes available. Hearing that interest rates have priced buyers out of the market is only half the story. The paradoxes are plentiful in an age of uncertainty.

Let’s explore some ‘current real estate information’ and do a little critical thinking. CNBC reports sales of existing homes were down in July (as compared to July 2021) by 20.2%. This is a huge statistic that may bring chills to a seller. But when we put on our thinking caps, we quickly realize that South Florida is not in the same paradigm. As an example, Pinecrest sales were down 37.7%, but North Palmetto Bay was up 14.3%. Even in neighboring towns, things can be vastly different. So do your best to get the signal, not the noise.

CNBC also reported that year-on-year, the median home price in July was up 10.8%. Not bad, but compare that to Pinecrest (+39.3%) and North Palmetto Bay (+38.3%) and the rest of the country looks like a bargain. Contrast it to Kendall (+58.5%) and Pinecrest looks like they are poor step-children. Again, signal to noise is critically important to your success in this real estate transitional period.

“What goes up, must come down.” This Newtonian saying was first applied to gravity, but time has proven this is true in many real-world situations. COVID has taught us a lot about supply and demand. The strangest things have caused panic buys and supply chains have broken down. Do you not believe the same thing isn’t happening in real estate? The key is to get the facts that apply to your specific situation and not allow the emotional noise to affect sound business judgement. A good Realtor® is key to helping you in this process.