Editor’s introduction: The greatest housing boom in U.S. history has made real estate the hot topic. Some people have become so obsessed with home shopping that they are visiting open houses as a new form of weekend entertainment.
In some markets, prospective buyers are packing Wednesday and Thursday open house tours. And each month, roughly 20 million consumers browse MLS property listings on the Web. They are the modern-day “Lookie Lou’s,” or people who dream of owning a home but cannot or will not take the plunge. We call them: Castle Clickers.
Market dynamics are also out of control. Multiple offers are common, people are camping out to get in on new subdivisions and double-digit home appreciation is not confined to the East and West coasts. (See Part 2: Online home listings fetch millions of eyeballs and Part 3: Hot housing market draws opera singers, engineers.)
Real estate is everywhere.Don’t try to run. Don’t try to hide. It is simply inescapable. It will find you at work, at play, as you watch television, listen to the radio or surf the Internet. Your friends and family, co-workers and neighbors are probably talking about it. Or at least thinking about it. So is the couple seated next to you at the local restaurant.
What are people saying about real estate in your market? Take a survey.
Case in point: Home & Garden Television, the cable channel better known as HGTV. During this nationwide housing boom, the popularity of HGTV has been surging. One of the fastest-growing cable networks, HGTV hit its highest weekly ratings in April, according to Nielsen Media Research, and that tops 16 consecutive months of increases in its primetime ratings. The network, now available in about 85 million households, features such programming as “Curb Appeal,” “Design on a Dime,” “Designed to Sell,” “House Hunters” and “Divine Design.”
Other networks have attempted to capitalize on this frenzy by launching their own home shows. Jack Myers, a media analyst who tracks programming, pricing and technology trends and innovations, said, “The focus on home and garden has gone through the roof. It is the single most popular reality trend today.”
The genre’s success certainly mirrors the success of the housing market, he said, as cheap borrowing rates have enabled more people to become homeowners. People are spending more money on redecorating, renovation and remodeling, he said, and he doesn’t expect the home-show craze to slow down.
“The fact that there has been such a housing boom suggests that there are many, many more years when people will be investing in the homes they’ve now bought,” Myers said. And the successes of print publications focusing on home and garden attest to the staying power of the genre, he said.
Kristal Pooler, a Realtor for RE/MAX Advantage in Beverly, Mass., said the buzz over real estate these days has amplified interest in the housing market, but this interest doesn’t necessarily translate to an increase in serious buyers. During a recent property listing in Beverly, the seller was flooded with calls, she said.
“Every neighbor had a friend who had to get into the neighborhood. Every distant cousin and work colleague wanted first dibs. As it turned out, none of these people ever came to the plate with an offer, though the property did go under contract quickly. It is beginning to sound like the dot-com buzz of the late 90s, only here it is related to real estate,” she said.
“The buzz and the press are causing sellers to overprice their properties and are creating false expectations in regard to price. Overpricing is the reason why our inventory is starting to increase and why the real estate market is starting to lose traction,” Pooler added.
Robert Earl, a Realtor for Keller Williams Realty in Vienna, Va., said he also sees the parallels between the real estate craze and the booming dot-com days. Earl, a former software development director for a now-defunct dot-com company, said that IPOs, tech stocks, and stock options were all the rage during the boom in online companies, and real estate has emerged as the latest hot topic.
“People back then talked about ‘What’s your stock price doing?’ Now it’s ‘What are the interest rates doing? Are you going to refinance? What’s my home worth?’ They are really staying involved with (real estate) right now and they are really trying to outdo each other when they bring it up,” Earl said. “It’s the feel-good story right now.”
Earl has also seen his share of real estate junkies who frequently sign up for open houses and make phone calls to inquire about the real estate market, but they never seem to commit to a transaction. “You couldn’t get them in for an appointment,” he said.
Mike McCoy, a Realtor for John L. Scott in Clark County, Wash., said there is definitely a hubbub over real estate these days. “People are just contacting us all the time. If you get one property that comes up for sale in your neighborhood, everybody wants to inquire, all of the sudden.” In some cases they are curious about the value of their own homes and their own real estate portfolios, he said.
Rick Libro, a Realtor for RE/MAX Excellence in Sarasota, Fla., said that the giddiness over real estate has in some cases led to unrealistic expectations about the housing market. “Everyday I’m getting e-mail from people who want to buy for $150,000 on the water. It’s never going to happen. Everybody is looking for new property here,” Libro said. It’s rare to find even an inland home for that price anymore, he said.
Libro said he hears a lot of talk these days about buying for investment before the boom dries up. “I’m worried for the people who want to be able to buy here–that they’re going to get priced out of the market,” he said. Mike Rowbury of All Pro Realty in Orem, Utah, said that he is also receiving a lot of contacts relating to people who are interested in real estate investment opportunities.
Tomorrow: How the Internet has fueled America’s obsession with real estate.
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