When will this market end? That's the question that was asked during the "feeding frenzy" that started around 2000 and just ended last fall. Buyers were frantic to buy houses because there were more buyers than houses on the market. The scarcity of listings made houses a rare commodity. As a result homes were selling for much more than the list price. Agents shook their heads in disbelief. After a failed offer or two, buyers were fearful they'd never find a house. The auction bug grabbed buyers and they bid blindly on houses in an attempt to win! Agents proceeded with caution. At some time, this market would have to end. Then what?
Well, folks, the end has come. It arrived last fall when showing requests on listings came to a sudden screeching halt. Was this just a return to the normal fall slowdown and spring would see an upsurge as usual, but closer to a normal market? Was the feeding frenzy finally over? Would we sigh with relief?
Spring came and the market was slower than a record on the wrong speed. The adjustment was hard for everyone to make, agents and clients alike. The market stall was couched as "return to normal" in an attempt to allay panic. Homes continued to flood the market. Buyers continued to be scarce. Interest rates remained low. Sellers refused to lower prices and thus houses stayed on the market while even more were added. The question of the year, "When will this market end?" (We're never happy!)
Shhhh, it's a secret. Most likely the slowdown will not end until prices drop. Something has to trigger buyers to buy once again. Currently the buyers are at an auction where there are 400 9N Ford tractors of identical condition and only 50 buyers. The buyers certainly are not going to competitively bid because there are so many tractors that each buyer could buy 8. The bidders are going to start bidding low and NOT bid against someone else. They don't need to. They are guaranteed a tractor and have lots to choose from. So, despite the yea, rah, rah crowd trying to convince us that the market is normalizing, something must change to make buyers buy. The easiest factor to change in a sale is the price. Once it comes down, buyers will buy again.
I would agree. I am seeing some price reductions. I also noticed that properly priced homes do still sell fairly fast. Buyers just have too much to choose from to bother making an offer if they don't like the price.
Posted by: teresa boardman | September 29, 2006 at 10:55 AM