I can only look at myself to evaluate this emotion vs. logic argument.
As a likely 2008 buyer I came to this site last year because I finally found folks not brainwashed by the real estate industry who show me the other side of the home ownership equation.
I like that this site focuses more on the logic than the emotion. I have pleanty of the emotion. My wife, she is all emotion when it comes to buying a home. “The hell with logic” she says, “I wan’t my damn house, of the size and style I want, and I want to do what I want with it without having to ask a landlord and I don’t want to worry about the owner selling and making me give up the home I worked hard to create” yada yada.
My emotion is simple, I am looking for a home, not an investment. But the logical side of me says don’t overpay because you just never know what life brings. The logical side says, be patient. This site has helped me remain patient.
To me, buying a home is very emotional. I can crunch numbers until I turn blue, but in the end emotion is at least half the equation. The trick is to ensure it is 49% and no more so logic will prevail. That is all I need. Emotion is ok. I want to walk into a home and say “wow, this is my dream home, I wan’t to grow old here and raise children here.” I want to see my wife tear up. Once I see that then I can let the logic in me drive the deal and have enough input to walk away if the price is too high and hope for another emotional reaction to a possible abode.
Buyers can be unpredictable with their emotions, with one house in SD, I was. But I think sellers are even more unpredictable. Their emotional attachments to their homes and their value are making for some long long days on market while they wait for that buyer that never comes.
There is a home up here I have discussed before. 4,600 sf listing for $4.4M, the same price it first listed for 1 yr ago. Larger homes on the same street are selling for $500k-$1M less. You see, that seller bought it at the peak of the market for $3.4M and then put $1M into it. So in their eyes, they are being very reasonable considering the market and just trying to break even (which we all know is already not the case at that price, it is still a loss). They will absolutely refuse to lower it one penny despite its actual value being about $3.5-$3.6M now. They are emotionally tied into it and that emotion is controlling any logic. The consequence is >1yr on the market and 2 offers in all of that time, both of which came in the first month of listing and were around $4M or slighly less. I think if they drop the price under $4M it might sell, but they won’t.
To me, it is sellers that are the most emotional right now and their emotions are rulling the day. And to me, that is what one should expect in a “buyers” market. Buyers can afford to be logical in this market. When I bought my current house during a market peak in 2000, it was buyers who were more emotional and their emotions were running the day. I am to be included among them. I overpaid by $100k for my house back then. Sellers were the logical ones, the patient ones.
The odd thing is that buyers were just crazed to buy anything at any cost in that “sellers” market. So you would expect that sellers are crazed to sell at any price in a “buyers” market. But what I see is that they refuse to sell at “any” price. So sticky prices on the way down. This suggests to me that downturns run longer life cycles than housing booms. Curious.
BTW, I think that CV house is priced about right based on what I know about CV in this market. I suspect it will sell, even without the landscaping. CV is still in demand by families and that is a good size house for that price compared to what you can normally get in CV, which is less house for not that much less money than this one.
