One of my realtor friends told me that he has several buyers waiting on the sidelines until September, because he thinks that in the fall, the motivated buyers will have to face reality. So will the builders. The peak summer selling season will be behind us, and there will be fewer buyers out there. Inventory might go up. Although the testing-the-water sellers may retreat, the ARM holders and Nokia people will be very motivated sellers. Those who need to sell will lower their prices to compete against the few buyers out there.
Our market prices are determined by 30,000 homes that are sold. All you need are 30,000 motivated sellers, and prices will drop very fast. The other 1 million homes will be repriced automatically.
I am surprised that these builders are not lowering prices. Builders are well aware of the cyclical nature of real estate, and are quick to adjust when they see the cycle change. I wonder what’s going on with this particular group?
