Well, hello! Nice to see you here. This is the revamped version of my blog, Apple Sauce. It’s a place to talk about real estate in NYC, and everything else. I look forward to your feedback, comments, ridicule and affection.
So, in case you didn’t know, they had the lotto drawing for the $1.5B Powerball jackpot last week. According to my Facebook feed a 27 year old millionaire who purchased $30,000 worth of tickets was among the winners, as well as a skater in Chino Hills, CA. I don't think it was this man who's live response on the News went viral.
The three winners will split the jackpot. The winning numbers were 4, 8, 19, 27, 34 and Powerball 10.
The jackpot surged to the largest lottery prize in history after 20 previous drawings yielded no winners. I am fascinated by how many people bought tickets. In my office, the agents did a pool, which I didn’t join.
After finding out my colleagues had not bought a winning ticket, my mind relaxed and began to wander. Why didn’t I buy a ticket? I knew why in the back of my neck, the part that constricts when I am afraid. I didn’t buy because I didn’t want to lose.
Now – I have played more than a few hands of poker. And I have also been involved in many negotiations. At times, I have raised the bet, raised the stakes, and applied maximum pressure. In all of those times, I did so with no fear of the consequences. I’ve pushed All-In with Pocket Aces, “Why?” Because if I am going to lose, and I lose betting with the best possible starting hand, so be it.
When people buy or sell real estate, we can look at the data, but I think Powerball tells us about not just the people who can afford to be homeowners, but human psychology across the board. Are they afraid to lose? Or are they unafraid about the consequences? Or perhaps, do they expect to win?
One of the real estate web sites – Zillow – says that only 2% - 3% of the buyer inquiries made ends up resulting in an actual closing. Now, the other 98%, are they acting out of fear – effectively paralyzed because they think they will lose money if they buy? I think so.
When paying close attention to the homeowners who do what it takes to actually complete a sale or a purchase they have the following economic perceptions in common:
1. They believe that Real Estate goes up in value (even a first time homebuyer has seen their family home gain equity)
2. They are afraid of opportunity cost, that they actually lose money by NOT BUYING
3. They want to store money and not have it be speculative
4. They are willing to compromise to achieve their goal