Who are your buyers?
All right sellers....it's your day here on America's Real Estate channel.
With all of the confusion about today's home buyers, let's try and quantify who exactly a 'buyer' is in Today's New World Of Real Estate.
Today's buyers are thoughtful, contemplative and VERY cynical. They have been looking at homes for some time and can't seem to find the urgency to make a decision. They trudge through homes for weeks repeatedly finding what would be a good choice only to walk away from every possibility because 'surely we can find a bank owned home for 50 cents on the dollar.' (Pssssst.....here's a hint: You can't. Banks are horrendously backlogged on foreclosed inventory and have no idea what their properties are worth. Odds are slim you'll get them to come to your price and you'll have to wait weeks for them to actually respond to your offer while you miss other good choices).
Today's buyers are not concerned about interest rates, comps or your investment as a seller. 'Hey, time's on our side,' as I was told last week by a prospective buyer....and you know what? They're right. Come Labor Day in Indiana and in many real estate markets across the country there's going to be a sense of desperation in the air. Sellers are going to wake up on September 2nd and realize they could be staring at another winter of paying the bills with no promise that next April things will be better.
Regrettably my trade association, the National Association of Realtors, has wrecked their credibility this year. They and their chief economists stood with stone tablets high on the hill this past January and proclaimed:
'The down market will turn this summer!' 'We are near the bottom.' 'Things will improve in the last half of 2008.' 'Stay calm....all is well!'
When they stole the line from the Titanic's cellist it was obvious they were too clueless to know better. What they have done is a tremendous disservice to home sellers across the country. They created false hope instead of motivating sellers to get their homes priced agressively enough to sell in the most challenging market in 40 years. That's right...this is worse than the late '70's.
Things will improve eventually.
My best guess is we will see some stabilization next Spring with better times ahead in 2010 but NOT before the current foreclosure and inventory mess get cleaned up by natural market forces.
If inflation caused by the high fuel prices pushes the mortgage rates up significantly, then ALL BETS ARE OFF FOR A HOUSING RECOVERY. I would also reiterate what I have stated countless times on this blog: Those that buy during this time will absolutely look back on it as one of the best investments they're ever made.
Those that keep wandering the path from house to house will still be wondering when the bottom will arrive long after values have turned and are heading back up.
Which one will you end up being?
Questions? Comments? Donations? Greg@GregCooper.com or 317.848.GREG (4734)