Let’s expand on yesterday’s post.
Why does it matter if the media keeps missing the story? They keep insisting that home sales have slowed due to issues on the buyer-side of the equation. But that isn’t what you see on the street.
Here’s what we keep hearing over and over:
1. Credit is tight – hard to get financing.
2. Low inventory – not enough houses for sale.
3. Prices have risen to unaffordable levels.
4. Wages aren’t rising.
5. No high-paying jobs available.
6. Buyers are confused/don’t understand mortgage options.
7. Bubble is forming.
But ready, willing, and able buyers just see over-priced turkeys everywhere they go. By the time you get to September, all that is left are the most outrageously priced homes, making you want to pack it in until next year.
The media’s one-sided message reinforces why they should quit.
Yes, we have lowly-motivated sellers who will wait for their price. We will always have those listings – I’ve had them myself – and sometimes the market catches up, or you get lucky and somebody overpays. But it’s clear that the market has flattened, and wait times are longer – and may never bear fruit.
Sellers who want/need to move now, deserve to know the truth. The reason nobody is looking at your house isn’t because of 1-7 above; it’s because your price is too high. There are plenty of qualified buyers in the marketplace; they just won’t pay what you are asking – and your price isn’t close enough to have them make an offer.
Here are reasons why sellers should know the truth:
1. The longer you sit on the market unsold, the more likely to be lowballed.
2. The market could get worse next year.
3. Your actual value might be way below what you think.
If the media reported that the problem is optimistic pricing, it would instead make sellers think about sharpening the pencil. Those who need to move could/would take proactive steps to solve their problem – but instead they just sit and wait.
This is typical for this time of year too – any seller who was close on price has sold by now. If sellers were properly educated and kept their pricing sharp, we could have a more balanced market throughout the year. Instead, the market goes dormant for 4-6 months, and then both buyers and sellers go nutty during the “selling season”.
Sellers – try a price reduction, they work!
You’ve just described a “normal” market.
The horror! The horror!
A normal market?!? We can’t have that!
For Pete’s sake, we can’t sell paper or airtime with a normal market. It’s so … boring.
That’s it. We are doomed. It’s the end.
It would really be something if the fascination and addition to real estate wore off in California.
“It would really be something if the fascination and addition to real estate wore off in California.”
The sellers can’t handle the truth! Buyers probably can’t handle the truth either.
I always ask people who are moving or have moved to our area for the first time- “what do you think about our housing prices?”
I always get the same answer- “They are outrageously high”
If you ask the same people a year or two later the same question- the answer becomes “well I guess that is how the prices are here ” -They become used to it and numb to it.
Their first impression is usually the right impression.
It wasn’t too long ago (mid 1990’s) that California Real estate wasn’t the holy grail. Don’t think that it can’t happen again.
With any free market there’s going to be winners and losers. We can’t all be winners. This is why the foreclosure process is so important.
What I find funny about realtors (other than Jim) is they should be pushing for foreclosures as much as theyre pushing for higher prices but they don’t.
If you take a step back and look at it, more transactions (home sales) = more $$$ for all realtors as a whole. Stock brokers, bookies, card houses all make money the same way. They don’t care if you make money or lose money all they want you to do is keep doing transactions.
It’s strange that the big realtor lobby groups don’t get this simple fact.