Mood of the Market
Mood of the Market
Today, I was reading a piece in Yoga Journal that illuminated some of the origins of the names of the yoga poses we practitioners do on a daily basis. Yoga postures are called asanas, and often, their Sanskrit names will add the name of a body part or character from ancient Hindu mythology to the word asana in a manner that is descriptive of the actual pose itself.
For example, Hanumasana -- a split in which one leg is out straight in front and the other, straight behind -- is named after the Hindu monkey deity Hanuman. Hanuman's story was that he leapt -- in a single bound -- across the Indian Ocean, from the island of Sri Lanka to the southern tip of India; Hanumasana mimics that mythological jump. Hence the split.
It occurred to me, while exploring this article, that there are a number of real estate fairy tales and fantasies that American real estate consumers seem to desperately try to live out in their real-life real estate dealings.
1. First up? The ever-so timely, mythological "Savvy but Upside-Down Homeowner Who Got a Massive Principal Reduction: Just Because They Asked." Smart people, who are very deliberate and strategic in their financial and other life decisions, who think that they can solve all their life problems with an hourlong Google search session think that there's no reason the problem of being underwater on their homes should be any different.
They search online, prep their loan-mod application with the utmost of care, call and track their conversations with the bank's loss-mitigation negotiators like an attorney, and just know that because their home is tens of thousands of dollars underwater -- even though they paid for it with a conventional, 20 percent down mortgage and have made their monthly payments on time, every time -- the bank will see reason and slash 100 grand or so off the balance of their home loan.
Unfortunately, reality often -- very often -- disappoints. Banks aren't logical, or they have motives and rationales unbeknownst to the homeowner. These folks have no economic hardship other than negative equity, as evinced by their perfect credit, hefty retirement accounts, impeccable job tenure and above-average salaries.
As such, they (more than most) can afford to keep paying their payments, and so the banks require them to. Punished for doing things right? It may seem that way through a very short-term lens, but the reality is that these folks can take their pick of prime rates and A+ terms in this credit-score-sensitive world.
2. Another oft-mimicked real estate fantasy is best described by Los Angeles Times columnist Meghan Daum, in the title to her memoir, "Life Will be Perfect if I Lived in That House." Those attempting to replicate this posture come in two flavors. The first are cousins of the loan-mod folks; they just know their perfect life in a perfect house is out there, but they believe the path to find it involves months on end of Internet searching, mortgage rate-timing, agent interviewing and extreme negotiations (i.e., lowballing).
The second are more of a bohemian bunch, simply prowling neighborhoods and open houses opportunistically until they stumble into "The One" where the Cape Cod styling (or, more often, Pottery Barn home staging) paints that amazingly vivid image of the life of which they've always dreamt.
I won't beat around the bush. Living in a great house is a wonderful thing. Great ... but reality check, people -- the house that makes life perfect doesn't yet exist. Ask Candy Spelling. If you're going to be happy, you can do that anywhere. And vice versa. Unhappy hops right on in those moving boxes with you.
3. And, finally, there's the Donald Trump fantasy that so many sellers try desperately to reenact. They think they bought low, they put in granite countertops, and then expect to hit the jackpot when they sell high -- no matter where the market is at.
The funny part here is that even the archetype, The Donald, hasn't batted a thousand in this vein; he's made plenty of dough, but he also invests millions and millions into improving his properties -- and the neighborhoods and even the cities in which they are located.
And even with all that, and the very thick swathes of his own skin he invests in his high-stakes real estate games, Trump has still taken more than one trip through the bankruptcy courts. (Though you'd best not hold your breath waiting to see him panhandling at the freeway on-ramp anytime soon. Or ever, actually.)
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.
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