The Commercial Record published an article yesterday called “It’s Really a Buyers Market”. (You may not be able to read it without a subscription, sorry) They published findings by Research Institute for Housing America (associated with the Mortgage Bankers Association) that said it was really a buyers market. Yes, we in real estate know that. But they put a name to the dilemma we often find ourselves in these days.
NEGATIVE SELLING SENTIMENT
The research says that:
92% of current home owners think it is a bad time to sell
80% of consumers interviewed think it is a great time to buy
Another telling statistic:
For those who purchased their homes from 2007 and up, they valued the sale price of their homes at 14% higher than the actual sale price. A 350,000 sale price means the home owner believes the home should sell for 399,000. That is a huge difference!
For those who purchase their homes before 2002 overvalued the sale price of their homes at 12% higher than the actual sale price. A 350,000 sale price means the home owner believes the home should sell for 392,000. That’s still a big difference!
The study also notes that inventory is down. I have noticed that, I attributed some of it to the recent storm we had in the Northeast at the end of October, the market really hit the brakes after that. Add the holiday to the mix and we are much lower in inventory than in previous months. But this study was nationwide, not just New England. I am curious to see what 2012 will bring in terms of inventory. Buyers are getting frustrated with the lack of inventory AND the unrealistic pricing we run into.
There are those that believe this lack of inventory may just be what the market needs. That it may help to stop the market from dropping more, may even help to ease prices up a bit. I do not agree with that as a whole, buyers still believe most homes are overpriced. And if the statistics are right, if agents have listed homes at prices their sellers want rather than what they know it will sell for, it will not help as buyers are very, very wary of pricing right now.
We need to bridge the gap between buyers and sellers soon. Sellers need to realize that 80% of consumers believe it is a good time to buy. Yet if they are not buying their home, the reason is price. Price overcomes all obstacles. Selling a home these days requires a seller to be very realistic about pricing, and the listing agent to be very honest with the seller. It is the only way to bridge the gap over the great real estate divide.
It is, after all, a buyers market!
C Andrea Swiedler 2011