This is probably an issue that resonates throughout the real estate community throughout the United States. In this current market many buyers just can’t seem to accept a “good deal” when they have one. They always seem to want to push the envelope just a bit more…and if they get that…the push it again, and again, and again…until finally they finally hit a brick wall and walk away – or until the fed up seller finally pulls the plug.
Lately I have given several buyer clients offers so sweet they are literally dripping and sticky sweet with goo – only to have them turn up their noses and walk away OR come back with extra demands that have left absurd behind and are now bordering on surreal. Sure, if you don’t ask, you don’t get, but there comes a point where, like Alice – we pass through the looking glass into an alternative reality.
There are several explanations for such a disconnect…they run the gamut between fear and greed then you add a dash (or a dump truck full) of inflated expectations and you have a recipe for one stalemate after another.
The fact remains that all too many consumers are not recognizing a good deal when they see it. They don’t understand that these are literally scrumptious prices and interest rates is a combo that would have left many 2010 buyers on their knees crying with joy. These buyers haven’t got the vantage point of the real estate professional who watches the market daily and has seen the declines. We know that this almost magical combination of bottom of the barrel prices combined with ridiculously low interest rate creates an affordability that will probably not be seen for a generation once it ends, but our buyers are awfully complacent and even smug. They think that if they wait – it can only get better. Hubris and greed are a potent drugs – and they are actually causing many buyers to miss the train…
A lot of buyers are acting as if a knife is falling on housing – but that’s so 2009. In some cases prices are down since the ending of the tax credit, but the main gains have been in affordability due to low interest rates. Some prices are trending down, others are flat, and some sectors are on the uptick. Even when trending down, we are looking at losses from 2-5% – that’s not the stuff of panic selling. Here are a couple of charts that I prepared for other blogs. Both or on single family homes and both illustrate in their own way that prices are either bouncing along the bottom or are increasing slightly.
The falling knife isn’t part of this current market. Buyers need to understand that deep discounts can only be had when risk is high. Sellers aren’t entertaining crazy low offers because they don’t have to. Crazy low offers are accepted when the knife is in motion – not after it has fallen. Both charts show that the knife fell in 2009. The Scarsdale market is well in recovery mode while White Plains is bouncing along the bottom. Granted, the big 50%+ drops seen in some parts of the country hasn’t happened here – and there are plenty of underlying reasons why it hasn’t. And buyers are disappointed! The area has always been expensive – and that was never likely to change.
Trying to stare down a seller into giving more and more concessions including their first born child to sweeten the pot only invites rancor and competing bids from more motivated buyers. There is a point at which a seller will give a buyer their walking papers and not look back or entertain other offers. In most parts of lower Westchester, prices are stable – bouncing along on the bottom. In some markets such as Scarsdale – prices are edging up.
So the good news is that you can say “YES” to the good – even great deals that are being offered. Remember – you won’t know that we’ve hit the bottom until prices are rising again.
© 2011 – Ruthmarie G. Hicks – https://thewestchesterview.com – All rights reserved.
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