Please forgive my absence last week, but I was on vacation with the family.
We visited the island of Nantucket, where intrepid whalers once hunted surrounding waters in search of the mighty beasts' precious oil, and where I spent a week hunting for a good sandwich that didn't cost a full day's pay.
As the debt crisis unfoldedback in the real world, I found myself scanning the faces of the tony and toned who roamed the pricey shops of Main Street, wondering if they were at all phased by the blood seeping from their Chanel clutches. Alas, the shops were still crowded and the restaurants packed with patrons apparently hungry enough to drop $25 on a cobb salad.
But leave it to the real estate agents to take the real pulse of the market.
I met a local developer who has worked the island for more than a few decades. His son is one of the top real estate agents in town and, according to his dad, is still pretty busy. But this developer told me an interesting story: A friend of his who owns one of the priciest home décor stores on the island said that two of her best customers came in recently…"hedge fund wives" he described. They had furnished their island mansions over and over, over the years, but told their dear decorator friend/business owner, "We're just looking this week. Certainly can't buy, given what's going on."
Now I'm guessing that no matter how much cash their husbands' hedge funds lost during the debt crisis, it wasn't enough to negate a good pair of 600 thread count sheets. What shut the ladies' wallets was not lack of cash but lack of confidence, and that is the same sentiment keeping potential home buyers out of the market today.
Picture a scale, if you will. On one side I am loading on a 4.19% 30 year fixed rate mortgage, a huge oversupply of homes for sale, a drop in home prices of anywhere from 30 to 50 percent from peak and fast-rising rental rates. The other side of the scale is confidence, and right now it's lighter than a feather. It cannot even come close to balancing all the positives on the buy side.
On TV today I'm reporting on all the markets where it's cheaper to buy than rent, with the help of a Trulia.com survey that will be out tomorrow. We also spoke to a Miami renter, who has a good job and sees deep discounts all around her, but Natalie McNeal doesn't have confidence in the market or the economy. "I have great career, I just published book, things are going really well now, but I've seen a lot of ups and a lot of downs in my profession and some have impacted me personally, so it makes you less - it makes you more risk averse."