In conversations with Sellers, there’s frequently a frustration with a perceived lack of control - it’s common for a Seller to fell that Buyers have all the ‘power’ in this Buyers Market.
That’s understandable because a Seller does have to do everything right in preparing, pricing and marketing their home and then wait for a Buyer to make an Offer. At the same time, however, it’s not a walk in the park for Buyers right now either.
In the strong Sellers Market just a couple of years back (tho it may feel like a lifetime ago!) Buyers might find 3-6 homes that met their needs. And Buyers were well aware that they had to jump on the opportunity and write a strong Offer for the house they liked best before it went Under Contract with someone else.
In this Buyers Market, however, Buyers are confronted with 20 or 30 homes that meet their needs. It’s much harder to select from among 30 options than it is to select from 6. And multiple options creates a concern that something better may come on the market tomorrow. The number of options can be overwhelming to a Buyer making a huge - and long term - financial investment.
In addition, Buyers are bombarded with messages from the media, from friends and from family, that there are ’great deals’ out there and that they’re pretty much an idiot if they don’t ’score the deal of the century’. I’ve had some young first-time home buyers reduced to tears but an ill-informed family member blurting “you paid HOW much?!?”
Real estate is regional - it’s as regional as the weather. A national weather forecast is not terribly meaningful - neither is a national housing forecast. Our market is (fortunately!) *not* California nor Nevada nor Florida. But within each of those states there are some very weak housing areas and some reasonably strong housing markets - its all local.
A ‘great deal’ in my primary area (Wake County, NC) might be 10-15% below market prices. A Buyer moving here from upstate NY closed this week on a 1500 square foot, 3 bedroom, 2 bath, no garage ranch home with new paint, carpet and appliances on an acre lot with a stocked pond for under $100,000 - that’s a great deal. Another Buyer recently closed on a 1600 square foot house with 3 bedrooms, 2 baths, 1 car attached garage in a more urban area for $158,000 - another great deal. And a Buyer is Under Contract now on a 2500 square foot, 4 bedroom, 2.5 bath, 2 car garage home that was listed at $235K - another great deal for it’s neighborhood.
The point, of course, is not how much the house cost but how much below comparable homes we can negotiate. Even more importantly, however, is that each of these homes offered an excellent ‘fit’ for my Buyers needs - even at a great price, the wrong house is still the wrong house.
I learned from a Buyers Agent yesterday that her clients decided to wait until the spring to purchase their home because they just couldn’t make up their minds on which house to buy. One of my Sellers’ homes was in their Top 2, so we were disappointed. More importantly, however, those Buyers may have made a very unfortunate decision because interest rates are widely believed to be going up in 2011 - and home prices will rise as the economic recovery lifts mortgage rates, too. Even beyond the financial aspects, that young family wanted to be in their new home for the holidays and - overwhelmed by options and perhaps not enjoying sufficient emotional support - that’s not going to happen.
It’s hard to be a Buyer in a Buyers Market but it will be harder still to live with the Woulda-Coulda-Shoulda’s delaying Buyers will experience. . .
9.22.2010