Buyer/seller “standoff” seems like a fallacy

[lendingbubblecontinues]

While it would seem fairly romantic to envision a classic battle between buyers and sellers out there, it doesn’t seem likely that this is truly the case.

While it is true that there are a FEW people out there (self included) that are waiting for prices to drop before buying their next/first home, the vast majority of people who are able to buy a home either have bought or are in the process of buying a home. After all, the price of a home is no longer relevant for most people, rather the important factor is the monthly payment.

My hypothesis is that there truly are very FEW buyers left and this is the true reason for the excessive overhang in many markets.

Does anyone else see it the same way? Or differently? Do any of the realtors on this board have a feeling one way or the other about this?

[sdrealtor]

I have several buyers ready, able and willing to buy. They are looking for a fair price in line with most recent comps. We have written offers on great but overpriced properties (about 10% above comps) and sellers refuse to budge. Time is on my buyers side, they know it and they can/will wait. It’s a one man sample and I dont know if other Realtors have clients waiting like me.

[lendingbubblecontinues]

Thanks for the insight. Why are they looking now when they know that time is on their side? It seems anyone “willing” to buy after such a dramatic run-up as we have seen over the past several years, should not really care about getting a “fair” price. Just buy it, man, and keep the party going on forever, right?

[PD]

SDR, have you told your clients about this site?

[Bugs]

Think about it – the average person gets their news on TV. They talk to their friends, relatives and neighbors; of these, 90% of our acquantances will lie to us about their less profitable decisions if given a chance to do so. A person who is reading the Union-Tribune qualifies as having more than the average exposure to the news. People who hang out on internet forums like this one are the tiny minority – we are the geeks everyone else ridicules.

Given these limited sources of information and considering how muted (until the last couple weeks) these sources have been about the potential for losses, why would the average buyer be spooked right now? I think the buyers who have pulled out are those who are more well informed – an example of that are the professional investors. The sheeple remain, and if there are big losses ahead it is those people who are going to get hurt the worst.

Unfortunately – and saying this makes me look heartless – I don’t think we really want those sheeple to come around too quickly. An more orderly retreat over a protracted period of time may have its merits. For one thing, having catastrophic failures among the lenders would affect credit availability. If that happened a sale at the reduced price still isn’t going through for lack of the 30% down payment or because of a 10% interest rate. Beware of unintended consequences.

[Anonymous]

Would it matter if he had? Personally, I only refer my friends to websites that have something of value to offer. I used to refer people to this website for a different view of the housing market. But the posts from the last few weeks reflect more of a rant than an educated opinion. The voiceofsandiego.org is where I would refer them now. Hopefully this site will once again become an informative place to share ideas without users taking jabs at one another whenever they see the opportunity.

[PD]

Any rants aside, there is quite a bit of good information to found here. I think it is a valid and interesting question.

[sdrealtor]

Different types of buyers than most with different agendas. Wealthy individuals that want to be here not where they are. Well aware of the risks and are willing to buy at a fair price in the current market. Certainly more the exception than the rule.

Its not my job to make the buy or not buy decision. If they want to buy that is their decision. My job is to help them fulfill their wishes not to convince them one way or the other. Similarly when prices were heading up 4 years, it was not my job to knock on the doors of apartments to tell renters that they should buy at all costs because it was the opportunity of a lifetime to make easy money.

[PD]

Four years ago, what did you tell buyers about the future of residential RE in SD? What do you tell them today? I am sure many of your buyers ask you for advice. What do you advise them?

[sdrealtor]

I give my clients the same advice today that I did 4 years. Buy what you can afford comfortably, finance conservatively, buy something you will be happy with for at least 5 years and buy something that will be relatively easy to sell in a good or bad market (i.e. no power lines, no busy roads behind, no tiny yards, nice floorplan, good location etc.)

[PD]

Thank you for your responses.

Are any of your clients expressing concern over the market reversing?
If you believed that the market was going down, would you have a fiduciary duty to tell your clients?

[waiting hawk]

http://smhbn.blogspot.com/2006/06/agents-of-fortune.html

[Anonymous]

SDR gets professional help:

MLS shows 21,500 active DET/ATT homes today. Amazingly, 5,900 of these are VACANT and 2,450 of the VACANTS have been on the market for 60+ days! That just about equals the meager closed sales counted for the month of May in this week’s negative article by the U-T.

Another .5 hike by the Fed may not raise the 30-year mortgage interest rates very much, but the fear mongering by the media (and a lot of folks on this Board) should soon complete the periodic transition into the new BUYERS MARKET.

Why use a checkbook to buy that good DEAL? Smart Buyers Agents will shore up decling price increases by asking SELLER’s of Vacant60 homes to do carry back notes against some of the owners ‘Fear Equity’. Proper matches of these buyers and sellers means great buys, mitigation of selling price loss, elimination of the pain of paying two mortgages, reduction of price “dumping” significantly below comps, and coming market stability that the media won’t discuss.

Opportunity knocks in a different way… Check out OwnerMayCarry.com for info and some potential SD Homes.

[PD]

“Smart Buyers Agents will shore up decling price increases by asking SELLER’s of Vacant60 homes to do carry back notes against some of the owners ‘Fear Equity'”

I don’t understand what you are saying here.

[JJGittes]

Well, I think the buyers are on the road to winning this standoff. I just saw that three new homes in Bressi popped up on the MLS. Apparently, buyers are not being enticed by these beautiful new homes, complete with thousands of $ of mello roos, and over $200 per month HOA fees.

[Author]

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