This evening I went to a real estate marketing mixer. The Title people told me that their lenders were telling them that they have tons of buyers qualified and ready to go, but that they (the buyers) were waiting to see what the market does.
Concurrently, I had a very busy first half of the year. But now? Calls and emails are down, yet blog and website stats are WAY up. What’s going on? The buyers are lurking… waiting to see what the market does. Waiting for the sellers to crack.
I don’t blame them. I’m telling my own mother-in-law, who is looking to retire in Reno, to be patient, see what the market does, and only offer on something significantly below market. Occasionally, these come up, and when they do, people pounce.
Today I spoke to some of the other agents in my office working with buyers. The verdict? Same story. Buyers are watching and waiting to see what happens. Like little vultures, they’re waiting to see who keels over first, then they go in and scoop up the very best deals. Better to be scooped up sooner than later, I think.
Reno Ignoramus
“Now these cheap mortgages that fueled the real estate boom are beginning to hurt the homeowners they once helped. Higher interest rates and the end of the honeymoon period for too-good-to-be-true teaser rates are increasingly causing payment shock for buyers.
MSNBC
Augsut 31, 2006
Reno Ignoramus
“Looking back at past housing booms, the first sign of the end is when a goodly share of buyers stop making offers and eventually stop looking, seeming to just disappear.”
“Talk is part of what changes the mood and actions of buyers, and the air is now full of talk of a bust. The covers of the New Yorker, the Economist, the Wall Street Journal and virtually every news magazine and newpaper in America has heralded the bursting of the housing bubble.”
The Wall Street Journal
August 31, 2006
Reno Ignoramus
“Beyond all these factors there is the simple psychology of expectations that is part of any speculative boom. These expectations can turn suddenly when alert home buyers get the sense that something might be amiss.”
“There is significant risk of a very bad period with slow sales, slim commissions, falling prices, rising default and foreclosures, serious trouble in financial markets, and a possible recession sooner that most of us expected. Deterioration in that intangible housing market psychology is the most uncertain factor in the outlook today. Listen hard and watch out.”
The Wall Street Journal
August 31, 2006
gotlots
Buyer psychology August, 2004: If I don’t buy now, I am going to have to pay 10%-15% more a year from now.
Buyer psychology August, 2006: If I buy now, I am going to have a 10%-15% loss a year from now.
Todd Tarson
gotlots… you must be in the flipping biz. I say that with all due respect. My buying clients are concerned about home values dropping and have put off their purchase in some cases. However, my investor clients left me long ago but I assure you they would agree with your assesment.
Now though as for the more traditional buyer, they can get a good deal on a home or property today at current market prices. I cannot and will not predict the future for them and if home value is an important deciding factor then they need to speak with a financial advisor.
However, when my clients that are sitting on the sidelines decide to buy I will do everything in the negotiations that I can to see that they don’t lose that 10 to 15% you speak of. Of course it is a concern, but the clients I’m working with seem like they will be spending the next 5 years or so in the property at the minimum (I know because I ask them at this stage of the market).
How long will home prices come down for?? That is a question I cannot answer. Can you?? Can a buyer that is planning on living in the home??
Reno Ignoramus
“The hard landing of real estate has only begun to be felt, as the downturn is still less than a year old and new housing starts have dropped by only about 15% from the fall 2005 peak.”
“In past down cycles, the duration of the downturn has been between 25 and 52 months, and in terms of unit delcines has averaged approximately 52% from peak to trough. So, simply stated, the worst is yet to come for housing.”
Street.com
8/31/06
Reno Ignoramus
“The housing bubble is deflating. Expect at least a 20% decline in median single-family house prices nationwide, and that number may be very understated.”
Forbes Magazine
8/31/06
rkybrl
“How long will home prices come down for?”
That question seeks out the bottom of the market. It is not possible to time the bottom in the housing market, just as it is not possible to time the bottom in any market.
There are signs one might look for. One such sign might be when Time Magazine runs the cover story
“Home Ownership Nightmare.”
Another sign will be when the backyard barbeque chat is “real estate has been the worst investment I ever made. I don’t ever again want to own real estate.”
When that happens, it will time to buy.
NVMojo
I wouldn’t say those of us who haven’t bought in Reno are like “little vultures.” We aren’t buying because we are worried about getting screwed at this point. But we see lots of great places we’d be interested in.
I also know that I don’t look forward to watching any more people hit with ARMs and we know a few in other markets.
retromodernjeff
People are actually Sheople, someone tells them to buy and they do, someone tells them not to and they don’t. Just don’t participate in this and you will do fine.