Right now home buyers are in an unprecedented situation where fear has gripped much of the nation and has even taken a bit of a foothold here in the valley as well. This is causing both buyers and seller alike to step back and take a careful look at their situation and pause a bit. This pause has resulted in fewer buyers in the market as well as fewer sellers willing to sell their home in such a climate. Mostly what we have left in the marketplace is sellers who have to sell and savvy, well-qualified buyers who are not afraid of a down market. These buyers are in the driver’s seat and are expecting to get a great deal. Sellers have already felt this change and have only a few choices, all of them unsavory. 1) Reduce their price to meet the demands of these newly-emboldened buyers 2) Keep their price high and hope for the best 3) Pull their home off the market and wait for better times. Gone are the days of multiple offers on every home which comes to market. Inventories, while not bloated, are still relatively high and represent much more of a slow-moving target for diligent buyers. The average number of days a home sits on the market has risen substantially in the past two months making the home search process a much more orderly affair.
Considering the protected nature of the peninsula real estate market, it is surprising to see fear creep into the minds of some sellers. Rarely do we see a market where some sellers are thrilled just to have a real buyer at the table even if they are coming in with an offer substantially below asking.
This fear is surely a temporary thing and will never be fully reflected in any statistic because most sellers are not willing to sell at any price just to move the property. That said, some sellers are in fact willing to sell at just about any price due to either fear that the market will worsen or perhaps because they must sell for one reason or another. The actions of this small percentage of sellers are not sufficient to significantly impact the sales price averages and this is why you will never see or feel this fear fully reflected in any statistics. However, the further in time we get from the events causing this fear, the more immune both buyers and sellers will become. The recent financial market events causing this fear have thus far not economically impacted most people in the area. Unless things deteriorate further, people will begin to feel more at ease and will get back to the business of buying and selling real estate.
While I believe our local real estate market has deteriorated for just cause, I also believe the fear currently being felt by some home sellers is not based on fundamentals and will evaporate as quickly as it came. This is not to say I believe the market is going to bounce right back. But I do believe the fear will continue to dissipate as we get farther away from the events which caused the fear. Once this fear is gone, the opportunity to find a fearful or needy seller will disappear and take with it any chance of finding a really great deal. Right now there are GREAT deals to be had by buyers willing and able to brave the storm.
Considering the protected nature of the peninsula real estate market, it is surprising to see fear creep into the minds of some sellers. Rarely do we see a market where some sellers are thrilled just to have a real buyer at the table even if they are coming in with an offer substantially below asking.
This fear is surely a temporary thing and will never be fully reflected in any statistic because most sellers are not willing to sell at any price just to move the property. That said, some sellers are in fact willing to sell at just about any price due to either fear that the market will worsen or perhaps because they must sell for one reason or another. The actions of this small percentage of sellers are not sufficient to significantly impact the sales price averages and this is why you will never see or feel this fear fully reflected in any statistics. However, the further in time we get from the events causing this fear, the more immune both buyers and sellers will become. The recent financial market events causing this fear have thus far not economically impacted most people in the area. Unless things deteriorate further, people will begin to feel more at ease and will get back to the business of buying and selling real estate.
While I believe our local real estate market has deteriorated for just cause, I also believe the fear currently being felt by some home sellers is not based on fundamentals and will evaporate as quickly as it came. This is not to say I believe the market is going to bounce right back. But I do believe the fear will continue to dissipate as we get farther away from the events which caused the fear. Once this fear is gone, the opportunity to find a fearful or needy seller will disappear and take with it any chance of finding a really great deal. Right now there are GREAT deals to be had by buyers willing and able to brave the storm.
Typically, the middle of January sees a substantial rise in new listings. Sellers waiting for the holidays to be over start bringing their homes to market. Buyers see this flurry of activity and snap out of their winter doldrums. This quickly results in an increase in the number of transactions getting done. This is why I believe the mid-January flurry of activity will mark the official end of the fear. I am not saying the market is going to take off like gangbusters. Quite contrary, I think the market will still be quite soft. We just won’t have the doldrums and despair we are currently experiencing. How many of you have worries or concerns about buying a new home? Let me know what you think.
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