Real estate, rock'n'roll and the buyers who love them.

Real estate, rock 'n' roll and the buyers who love them.

I usually avoid "Going Out Of Business" sales, especially if I've been a regular customer. Because when the signs say Everything Must Go!, the signs point to everything getting weird.

Shifty-eyed bargain-hunters who slouch furtively through the store. Inventory, fixtures, and clerks that vanish overnight. Orderly retailing yielding to close-out anarchy. Maybe it's just me, but I've always wondered if the Sack of Rome wasn't like this, only with more smoke and war-like cries.

You may have heard that Tower Records' bricks-and-mortar operation is going out of business. This is one close-out I'm not avoiding, because it's a great opportunity to add to my CD collection. These days I listen mostly to comfort music—1950s country and rock'n'roll—and this might be more information than you need. And no, actually paying for music isn't early-adaptor behavior, but that vintage radio collection in my spare bedroom might be a sign I'm not into bleeding-edge.

So I hit Tower as soon as I heard. Everything was 10 percent off, a decent but not compelling discount, so I bought just two CDs I'd been meaning to buy anyway. But a woman shopping near me had a shopping basket stuffed with CDs. Clearly, 10 percent off was a major buying opportunity for her.

I mentioned the sale to an agent in my office who buys CDs by the boxcar and has a collection to rival the Library of Congress. Was he excited? No, he scoffed at Tower's 10 percent discount. In fact, he metaphorically spit on Tower's 10 percent discount. No buying opportunity there for him.

I went back to Tower and now everything was 20 percent off, so I bought more. Tower held the discount at 20 percent for several weeks, which really irked me. Didn't Tower know it was desperate? But they kept putting stuff on the racks I liked, so I kept buying.

I mentioned the 20 percent discount to the agent. Again, he scoffed. Again, he metaphorically spit. Still no buying opportunity for him.

Now Tower's discount is up to 30 percent, with—be still my heart—an extra "manager's special" 10 percent off each Tuesday and Wednesday. No, they're not giving it away, but now the discount is big enough for this motivated buyer to pull the trigger.

Even the agent I mentioned finally quite scoffing and metaphorically spitting and stopped by Tower. But he's still scoffing etc. I won't buy yet, he says. I'm waiting for the discount to hit 50 percent.

I laughed and told him he's just like the homebuyers who keep waiting for prices to go down down DOWN, the same buyers we agents ridicule because "everyone knows you can't time the market". The same buyers who pass up good deals for the spectacular deals they think lie just around the corner.

But me, I'm a bird-in-the-hand kind of guy. If I see a retailer crowded with buying customers for the first time in years, I'm not waiting for that 50 percent discount. Tower may never get that desperate and if it does, I probably won't like what it has left. Here's an example: England's Newest Hit Makers, the Stones' classic first album, sold out at 10 percent off, while their aptly-named Sucking In The '70s lingers unloved and unbought even at 30 percent off.

I'm also working with this constraint: you don't download obscure good old boys like Buddy Knox from the Internet, or find them in the racks at Wal-Mart. If you're looking for something out of the ordinary, you suck it up and pay, when and where you find it.

So as we leave Tower slowly closing out its inventory and shuttering its stores, we have:

A seller that "should" be desperate but isn't
A store that's busy, with the good stuff selling quickly and at a relative premium
Some buyers taking the good thing now, even though it might get better later
And other buyers waiting...waiting...waiting to wring that last drop of discount goodness out of the market.

Maybe you see where I'm going with this. Let's switch gears to real estate in late 2006:

I have yet to find a desperate home seller. I'd like to, and they may be out there somewhere, but they're not in the traditionally sought-after neighborhoods where I usually work. Why not? Like the method actors ask, "What's my motivation?" There's no recession. There's no tech bust. There's no country we're thinking of liberating, no looming Armageddon everyone is scurrying around trying to duck. Almost everyone has equity: 100 percent financing is rare in my area. And the booming rental market gives most home sellers a Plan B if they can't sell.
Well-priced and well-presented homes still sell quickly and sometimes with multiple offers, while everything else just sits and gathers dust. Open houses are busy, at least for homes new to the market. And if you're looking for something out of the ordinary, like an affordable single-family home in Palo Alto, you suck it up and pay full retail, when and where you find it.
Some homebuyers are taking the good thing now—30-year fixed rates under 7 percent—even though home prices might drop over the short term.
And other homebuyers are waiting...waiting...waiting.

CDs or homes, it's tough to know exactly when to pull the trigger. In fact, it's impossible. That's why it's my feeling that if now is a good time to buy, now is the time to buy. Don't make homebuying even more complicated.

Markets, whether they're for CDs or homes, are bigger than you or I. I'll take whatever good they occasionally offer us little guys, and be glad for it.