It's an Illusion

Some are waiting for Lucent to get back to $54; it was at that price in 2000 because of irrational exuberance, market hype and speculation. Today it is listed as US Alcatel-Lucent USA Inc.

In late 1999 fundamentals in the stock market were considered by many to be an old fashioned way of looking at value.

The vacancy rate in the rental market grows daily and is a sure indication of supply and demand at work. Demand for rental housing in Mesquite has fallen off a cliff and supply continues to balloon. Real estate speculators/investors are offering more units, in many cases not because they want to be landlords, but because they can't get out. At least not at the price they want.

Real estate like stocks does best when bought low and sold high, and generally is considered a long term investment. Sellers today seem fixated on last years prices or what they could have gotten at the market peak, or what they paid for it. Of course none of those factors have anything to do with today's market value.

This is not just about making money though, it seems to be about the fact that if they sell for less than they paid or less than their neighbors sold for, then they have to admit they made a mistake. Not many are willing to publicly (or even to themselves) admit they missed the boat. That they might have screwed up.

Since the stock market ticker tells us by the minute exactly where we are, what the current price is, there is no illusion involved. Real estate on the other hand allows for a great deal of illusion and misinformation. You hear so and so sold for this or they are asking that, we point to comparable sales and they say but mine has a better view, or nicer tile work.

As the number of sales slows and inventory grows, those still selling are increasingly banks and desperate sellers pushing short sales. Those sitting with over priced property for sale are really saying we don't want to sell at today's real market price. Rather than accepting the fact that the market has changed they chose to stubbornly resist reality. Living the illusion and denying the facts.

In a market where buyers from out of town do pop in and buy, often paying cash and using their home market as the only comparison, with no need for an appraisal, some sellers have been lucky. It looks like as the market adjusts we see fewer and fewer of these types of lucky transactions.

Many of the asking prices we see today are real only in the minds of the sellers; they never were real, even at the market peak. Like a beautiful mirage in the desert, speculators and dreamers dealing in illusions to set prices.

The term caveat emptor should be taken to heart by buyers today. There is a real danger if you don't know the market and trends, you could easily over pay.

The only way to get past the illusion and get a true current market reality check is to sit down with an open mind and a knowledgeable, experienced real estate professional who is willing to spend the time to educate you.

Many sellers are going to have to swallow their pride and take the market as it is, or keep the property.