Be Careful What You Wish For
Have you ever wished for something, only to later question that wish? There is a common saying that goes, “Be careful what you wish for,” but what does it really mean? The book Monkey’s Paw, written by WW Jacob, is about a family who makes a series of wishes. Their first wish is to receive a large sum of money to pay off their debt. This wish comes true, but with the consequence of their son being killed in a work accident. The compensation from the tragic death is the equivalent of the debt. Struck with immense amounts of grief, the family makes another wish to have their son come back to life. This wish is also granted; however, the family fails to specify in what condition their son comes back to life. When he returns, the family is filled with deep regret as he is now a walking zombie.
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These double-sided wishes are a common theme in various stories; the storyline of making a deal with the devil, only to have the granted wish not go as planned because the person asking for the wish failed to specify all the wish conditions. “Be careful what you wish for” is the idea that you may not have thought through all of the penalties of having your wish come true. And consequently, the wish that you thought was ideal may in fact not be as good as you had hoped for.
Famous rapper, Eminem, has a song called “Be Careful What You Wish For.” This song is a modern version of Monkey’s Paw. Eminem wishes for fame and fortune, receives it, but then questions it. Here are the lyrics from Eminem’s song:
This is what I wished for
Just isn’t how I envisioned it
Fame to the point of imprisonment
I just thought the shit’d be different
But something changed
The minute that I got a whiff of it
I started to inhale it
Smell it
Started sniffin’ it
And it became my cocaine
I just couldn’t quit
I just wanted a little bit
Then it turned me (in)to a monster
So now the question begs, “How does ‘be careful what you wish for’ relate to real estate?” Recently, us at the eXimus team have had some passionate discussions about the market. Over the last 18 months, we wished for the market to come back to life after the slowdown, or near stoppage, from the outbreak of COVID. Our wish was granted; however, we failed to specify in what condition. Neither the team, nor I, nor any other real estate experts, expected this wish to come true in such an explosive way!
This explosive wish was granted by the following factors: ultra-low housing supply, rock bottom interest rates, and prices rocketing to record highs at a pace that has been hard to fathom. In fact, pricing over the last year has been changing in some cases by tens of thousands of dollars per week. This wishful market is not so wishful. The flipside, or consequence, to this granted wish is that the first-time buyers have been dealt a bad hand.
But it is not only the first-time home buyers who are suffering; what about the homeowner that is looking to downsize, upsize, or right size? They, too, are not in a wishful place. The euphoric sensation of selling for hundreds of thousands of dollars more than they expected in multiple offers quickly sets off this thought process: “Where am I moving? I might be homeless! I am now a buyer in a multiple offer bidding war, and I ended up paying hundreds of thousands of dollars more than I was planning on to secure my new home!” It cannot be emphasized enough: be careful what you wish for!
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These sky-high prices are not only a problem for those dreaming of home ownership; these sky-high prices are also crippling our economy. With the surging prices comes surging rents. There is a correlation between job opportunities and pricing: where there are more job opportunities, home prices and rent are the least affordable. Because of this correlation, it encourages some to move away, or discourages others from moving to where the economic prospects are best. In the end, businesses suffer because of a lack of competent and skilled workers resulting in consumers experiencing poor services, or even a lack of services. Again, be careful what you wish for!
If you are asking what my wish is today for the market, here it is: I wish for a market that is slightly more than a balanced market, or a market that is pushing into a sellers’ market. When a market like this occurs, we see property values increasing at a moderate rate of 3-5% per year. The best part about this market? Everyone wins! First-time buyers, move-up buyers, mover-down buyers, investors, and of course, sellers–they all win!
The phrase, “Be careful what you wish for,” has been said a lot in this article, but it really is true! Eminem concludes it by saying:
‘Cause you just might get it
And if you get it then you just might not know
What to do wit’ it, ’cause it might just
Come back on you ten-fold
We truly do need to be careful what we wish for, especially when it comes to real estate. And speaking of the market, it continues to defy logic. Another month, another outrageous month of a “sellers’ market” throughout the region. The Fraser Valley’s STR numbers (Sell Through Rate) for most property types, and sub-markets, experienced an uptick from last month and in most cases a significantly stronger October than the previous year. While the Vancouver market had gains, they were not as pronounced as the Fraser Valley market, but still well above a normal sellers’ market. Where does this end? “Be careful what you wish for”, the wish that you thought was ideal may in fact not be as good as you had hoped for.
Please reach out to our team for more information or help with all your real estate needs.
Click Below To See The Fraser Valley Stats:
Click Below To See The Vancouver Stats:
STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales
Randy Dyck
Personal Real Estate Corporation
604-807-4366 or randy@eximus.com
