Buyer activity has picked up lately, but I’m not so sure that will translate into a slew of new closings. People in my office are busy, but we seem to be spending more time on fewer, more delicate escrows that can easily evaporate at a moment’s notice. Every deal is tenuous. Actual closings are like little miracles.
Yes, pendings are up. But how many of these are meaningless escrows between a buyer hoping to negotiate a short sale with a bank that takes sixty days to actually respond to anything… most buyers walk after four weeks of stonewalling.
Sellers are still coming to grips with the situation at painfully slow rates. If they’re lucky enough to get into a deal, they’re nervous throughout the entire escrow, worried that the buyers will flake and run. Yet there’s always one dumb thing they’re willing to die on the cross for. They’ll dig in their heels, turn psycho, and actually jeapordize the entire deal over a trivial $50 item:
"I will not clean those rain gutters because I’ve already given up so much for that greedy buyer!"
That’s when the agent steps in, manages their client’s delicate emotional state, and works out some kind of solution with the other side.
Buyers, too, are extremely skittish and think everything should be discounted 20% or more. If they get a good price and get into a deal, they’re nervous the entire time because it’s a huge purchase, the sky is falling, and they are deathly afraid of losing money. If the seller gets weird about something that the agents can’t resolve, the buyers will bolt and run:
"I can’t believe that greedy seller won’t clean the rain gutters in this crappy market after refusing to buy down my interest rate."
At this point I’m convinced that a degree in psychology would have been useful training. In any given transaction these days, one or both sides freak out, the deal nearly falls apart, and hopefully the agents are calm, congenial and can hold things together. Yes, emotions run high, but usually the buyer is getting a good deal, and the seller is lucky to be selling, but neither side seems to recognize it until the deal is finally done.
Okay, time for the latest Link-O-Rama courtesy of Reno Ignoramus (and Perry, and Incline Jim):
Nobody Talked Housing Into a Recession
Buy Your New House Before the Old One Goes to Foreclosure
Foreclosures Hit Tahoe-Truckee
Las Vegas Foreclosure Bus Tours
Seriously, should Guy and I be doing these?
More Foreclosures Than Resales
Hmmm, sound familiar?
Nevada Cracks Down on Loan Fraud
buying in Reno
I understand the issues facing the sale of existing homes, but how has the recent aggressive reduction in prices for new construction faired over the last quarter. The sales offices are all talking about the recovery that is happening. I am skeptical and as with any market there is always a tendency for a small short term up swing in acitivity and prices that have little bearing on the longer term picture. Are you seeing buyers migrate to new construction or is there just a general concern and reluctance in all situations
Diane Cohn
BIR: Some buyers are going to new construction because those tend to offer the most value. Others stick to resales because they have immediate needs for housing and don’t want to live in a treeless, cookie-cutter neighborhood. That said, buyers actively shy away from new housing if they see a lot of empty lots and not much builder activity… most people think it’d be creepy to be living in the only house standing in a sea of empty lots.
GreenNV
Be very, very afraid of new develpoments without a lot of construction activity. Be very afraid of new developments WITH construction activity. I’ll be posting about this soon, but I’m tracking over $100 million in developer defaults going on right now. That half constructed house next door could be there a while.