Yesterday these comments were made a few posts back by potential buyers:
- So, for me this translates into “not going to overpay, no way no how.” I guess the issue is how long I can hold out, eh?
- Qualified and ready to go, but extremely frustrated and not going to drop $800K just to get into something…
- Looking for past 3 years in Coastal Carlsbad 92011. Anything decent is either already picked up or gets priced out with multiple bids. Anything under 800K and within the reasonable parameters is just an illusion … its just not out there.
- I’d be very happy to overpay a little. The reality now is buyers are expected to overpay a lot.
Thank you for participating, I appreciate your candor.
Their thoughts reflect what most buyers are feeling. The frustrations fall into two categories; the lack of reasonably-priced quality inventory, and seeing properties sell for amounts that far exceed expectations.
How do buyers cope?
I think you can divide buyers into three categories:
Trophy Properties – Many who have waited this long aren’t going to settle for any old house now – they are going to buy a cream puff. These are mostly determined by location and condition, then price – because there is intense competition for the trophies, you can’t get hung up on price if you expect to win. The house on Glaucus was listed for $949,000, and of the six offers submitted, three were all-cash offers over $1,000,000.
Value Buys – For buyers who can live with some warts, and just want to get a house at a decent price, there is still an intense tug-of-war. The sellers (and listing agents) price their home as if they are selling a trophy, and usually they don’t have to sell, they aren’t giving it away. etc. How can you get those at the right price? Waiting is the only solution – the sellers are extremely over-confident the first week of the listing, and your only choice is to wait a month or two, and hope they wear down.
This property was a good example:
It listed for $1,395,000 in March, 2010. We offered $1,350,000 a couple of days into the listing, and they responded with a $1.385 counter. We thought our offer was good enough, so we waited, and 71 days later we finally entered into a contract to purchase at $1,265,000, the eventual sales price.
Not Playing – For those who refuse to battle it out, and are comfortable on the sidelines in one form or another, no problem. These include those who are looking and are making offers, but only on their terms. The lucky sale still happens, but these days it’s usually the seller, not the buyer, who gets lucky. Hang in there, but if you see one you really like, consider adding a little extra mustard to your offer, just to get it over with! If you don’t, chances are someone else will.
What are the biggest fears?
Higher rates might cause prices to come down, a flood of foreclosures could change the game, and a natural disaster would certainly impact the market.
But for now, the market for quality buys is blistering hot on the street.