It's Raining Cats and Dogs!

This month, we turn our attention to yet another common phrase whose origin is unclear. Of course, the phrase is clearly associated with heavy rain, so I think the explanation that makes the most sense to me is the Greek expression cata doxa, which means “contrary to experience or belief”. There are other theories as to the origin, but none of them have any evidence to support it.

You might say that the current real estate market is Cata Doxa – contrary to experience or belief. Nowhere in history have we seen such a shortage of available homes and condominiums. On average, our local market has maintained about 2,000 homes and condos available for sale at any given time. Today we are barely over 300.

You might assume that due to the Covid lockdown, the real estate market would be depressed, but quite surprisingly, the exact opposite is true. Buyer demand is at a fever pitch and most homes are selling in the first few days with multiple offers, many over the asking price.

One of the reasons that the inventory is so low is the lack of new construction. Unfortunately, the price of lumber, copper wiring and plumbing, and many other components are both hard to find and extremely expensive. In a normal market, new construction would add several hundred homes to the inventory, and more would be built on demand.

As I have written in past articles, these conditions will not last. Raw material prices and supplies will eventually get back to normal as will new construction prices. When this occurs, market dynamics will settle back into a more predictable and stable trend.

Exactly when this will happen, nobody knows. We will be watching for early indicators that things are about to change and share what we know with you in this monthly article.

Until then, it’s certainly Cata Doxa!

Jonathan R. Krause President, Gambino Realtors, 815.282.2222