Potpurri and 'wagging the dog' in Today's New World Of Real Estate.
A random collection of Real Estate 'potpurri' is up for today's post.
Right now it's the 'Wag the Dog' Theory when it comes to the current state of the housing industry. Think about a dog chasing a car or for our purposes, the News Media and home sellers reacting to the housing market. No matter how fast the dog runs, it will never catch the car. The dog will never slow the car down. And, the dog will never bite a moving tire. What must the dog be thinking? In parallel, the media will continue to report on any and all bad news about real estate. The consumers will always react to that news. Buyers get more conservative. Sellers will slowly adjust prices accordingly in a group, never really getting ahead of their 'competitors' and never really catching or slowing down that 'car.' The media drives the market down psychogically and then the market declines only for the media to do it all again in a couple of weeks. The media (tail) wagging the dog (market).
Today, many sellers are running after the market, the same way dogs chase vehicles. What are these sellers thinking? Their home is the only castle for sale? Buyers will love the scent of their lilac bushes so much that it will temporarily cause them to forget the competition? Is it possible the smell of fresh baked bread will cause a buyer to pay yesterday's price in today's market?
In my opinion, it is imperative for a seller to price their property 10% below market in order to sell promptly and avoid being left in the long line of expired listings. It may be an election year, but it will be a long wait for the inventory levels to decrease to a balanced market. By suggesting a seller has an overpriced property, the real estate agent runs the risk of being the messenger that gets shot. Courageous agents tell the truth. Cowardly agents hope the overpriced property will generate sign or ad calls while the seller reduces the price and stigmatizes the property with additional days on the market. The next time you see a dog chasing a car, hopefully, it will remind you of the futility of chasing a declining real estate market.
Painful.... is the term I would use to describe the current level of bank owned properties. In Carmel, 271 are on the market, Lawrence Township over 600, Pike over 850 and on and on and on. Remeber every bank owned selling at .60 cents on the dollar affects the entire market.
Over night interest rates are fairly steady at 5.78% for a standard 30 year fixed. The qualifications have changed dramatically for every type of loan and are much more stringent. Check with your lender before getting too far down your buying road and make certain you have a mortage rep you can trust. Liar's poker means nothing in the lending and home buying world. They can promise you anything...delivering is another matter entirely.