Until Monday, I had been staring at the same set of numbers with a dubious eye. The figures on the screen were telling me one thing, but my intuition kept telling me something different. It’s not unlike the feeling sellers and buyers have when they’re staring at the comps, the hard evidence in front of them, and still quibbling over the relative value of a property.
In my case, though, it wasn’t the comps that had me confounded. It was the pulse rate reading on the blood pressure cuff I keep on the desk in my home office (three kids, three dogs and a real estate career – all reasons to always have a cuff nearby.) There simply was no way that the ridiculous numbers on the display could be right; that portion of the cuff had to be broken.
Four days at Arrowhead Hospital later, I can tell you it wasn’t. Denial can be a powerful and dangerous thing when applied at exactly the wrong moments.
That’s not exactly what this post is about, however. It’s more a question of the numbers and how we as real estate professionals, as buyers and as sellers interpret everything. We all want to filter what we see against either our own perceptions or our own prejudices. If we’re looking to spend less on a house, of course we will believe the market is continuing to fall and there’s no reason to pay market value. If we’re looking for a higher net, of course we believe our home is worth more than it is.
Sales in the Phoenix market have been fairly robust for 13 months now … there’s no disputing that. And yet some still call it a false recovery while others are waiting for the heady days of 2005 to come back.
The truth is, all of us are guessing to a degree, just like someone with an abnormally high pulse rate (unless you’re a hummingbird) going on WebMD to figure out what’s going on, all the while ignoring the empiric evidence right in front of his face. We want to believe the best, or at least believe we’re right, so we twist everything to fit that model.
It’s a dangerous way to go … less so in the world of real estate, decidedly more so in the cardiac world.
Sometimes the numbers are the numbers and the trend is the trend. There are variations and exceptions but more often than not, homes are priced where they are and why they are for a reason.
The real estate cuff may seem wacky at times but it’s not broken.