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Posted by on Dec 7, 2012 in Forecasts, Frenzy, Market Buzz, Market Conditions, Spring Kick | 0 comments | Print Print

“Flinch” Period

What will buyers do when faced with rapidly-rising list prices?

We know that sellers are going to be adding more frosting to their already better-tasting cake.  Here is the San Diego detached-home graph, showing the recent list prices going through the roof (note how the sales-price gains are moderating):

Look at the difference in list pricing between 2011 vs. 2012!

The natural thing for buyers to do is pause.

Then some combination of outrage/disbelief/indifference kicks in, followed with the typical scoff, “we’ll see if anyone else goes for that!”.

Thus, from February 4th to around mid-March is the critical “flinch” period.

Because those first few weeks after the Super Bowl will be when we see if the most-motivated buyers, spurred by low rates, inflation fears, and overall frustration & anxiety, will jump in and pay whatever it takes.

If the scoffers see a bunch of OPTs go pending in their target areas, then they might follow.  If they don’t, then the standoff is on for 3-4 months, as a glut of unsolds starts to build.

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