Over the past several years, as many owners of very large suburban homes saw their kids depart for college and elsewhere to become ’empty-nesters’ they were confronted with multiple challenges to sell their homes and downsize or relocate. This market stalled fueled by the desire for more efficiently scaled homes, urban living and the limitation of the SALT tax deductions in the December 2017 tax bill that impacted many of these homes in higher tax states.
Then along came COVID-19, and all of a sudden a new buyer pool opened for larger homes, and this market re-awakened with a bang. What until early 2020 seemed like a ‘dying’ market sector that had experienced dreadful sales volume and substantial price declines in many areas roared back to life. Now these empty nesters have the ability to move on with their lives, relocate to smaller homes more suitable to their space needs, or move back to the urban environments they left to raise kids in a suburban setting. Or move to another location altogether based on retirement needs.
In January, 2018, horrific mudslides devastated parts of Montecito – one of the most beautiful places on earth – following massive wildfires. This week news broke that Prince Harry and Meghan Markle bought a massive house in the area, following extremely robust buying activity in recent months that has consumed much of the inventory that had stagnated for many months. What to some seemed hopeless at one point, is now thriving again.
What do these two things have in common? Time. Time has the capacity to unlock that which may seem impossible or even hopeless. Time heals most things. Time allows us to get a clearer perspective. Time answers unanswered questions. Time allows evolution and innovation to get back on track. Time allows us to forget. No area of the planet – or real estate markets – is immune from some form of adversity. And it is usually time that restores things back to ‘normal’.
Yes time implies the one thing we all lack most….patience. In the waiting, some will panic. Some will predict eternal gloom and doom. Others, however, will wait and see while some will see opportunity, roll up their sleeves and get back to work, taking accurate inventory, evaluating solutions and future mitigation to prevent repeating past mistakes. And ultimately benefit when the stalemate unlocks.
The “GREAT UNLOCKING of 2020” of the stalled large-house market is one example of how all (most) stalled markets turn eventually, some sooner than others.