Motivated Sellers and Complacent Buyers
November 5, 2008
Post Tags: long shadow , timing the market
One of the issues today is the misconception many buyers have about the availability of homes on the Tucson real estate market.
The Long Shadow
The Long Shadow
I call this living under the long shadow. Buyers remember to old day. They believe there is still a glut of houses on the market. They assume there is no rush, it will still be there when/if I decide to make an offer.
In Tucson, right now, there are areas with less than 6 months of available inventory. Some buyer are in “no hurry” and do not believe there is any sense of urgency in making a decision. Unfortunately this is as misguided an attitude as the attitude sellers had back in 2006. They were in no hurry someone would meet their price. Now some buyers believe the house will b e there waiting for them when and if they decide to make an offer. The belief being the longer they wait the probability of a lower purchase price being possible. This is the reverse gamble of sellers and it is still a gamble. Remember you can save a $1000 by waiting a week and pay $10,000 more over the life of the loan. No one knows when bottom, the ever illusive “bottom” will be reached. One thing we do know it won’t be reached in every city at the same time. We also know the inventory of available homes in Tucson is shrinking, not increasing.
Foreclosures and Short Sales
Yes they do exist here. But not in the numbers you find in other metropolitan areas of the country. If you are in no hurry and have money to spend with no guarantee of a purchase then these might be a viable option for an investor to consider. For a person needing a house as a home, it is a long arduous process. Many home buyers don’t have time (six to nine months) to invest in attempting to purchase a home.
Sellers are being realistic about pricing. It only took a couple of years to get the rose colored glasses off. It has always been about priced to sell. It still is. If you are a buyer, I’m NOT saying this is a good time to buy. I never say, “It is a good time to buy”. I do say there are some bargains in the Tucson real estate market. Some buyers are getting some very good deals.
Trying to Time the Market
Trying to time the market is never a good idea. It doesn’t matter what the market it, it is never a good idea trying to time it. Buy what you need when you need it. If you find a deal and you know you won’t stop needing it, buy more. I can tell you this. “Real Estate Agents are being advised to purchase property now for their own investment” Someone thinks it is a good market, it might not be bottom, but it is a good market for some.
November 15th, 2008 at 4:33 am
Can’t help feeling you’re “Bigging-up” the market!
Inventory means squat. When house prices start increasing, that’s when things have turned.
There’s still a lot of people with property on the market asking unrealistic prices…. that’s why they are on the market for several months or a couple of years even….
November 15th, 2008 at 7:51 am
Thomas,
Not sure what “Bigging-up” the market is.
I do have to disagree with on the statement “Inventories mean nothing” When there are fewer houses for sale prices go up. It is supply and demand.
Not only is every community different, each area of a community is different. There are some subdivisions with waiting lists of buyers to get into them. When homes come on the market there they never last long.
One area of Tucson will have 6 months inventory while another area might nave 20. Inventory of what is available to purchase does have an impact on price. It is only one factor but it is a factor.
I agree there are some home overpriced and some way over priced. I’ve stated in other posts I don’t consider these homes on the market. They are just testing the waters and inflating numbers of what is for sale. It isn’t hard to find a home that is overpriced. But the general attitude that all homes will be there when I get ready is a false assumption. That was the point of this post. If you find a home you really like, and it is priced to sell don’t assume it will go down further.
Finally, I wouldn’t take this single post out of the context of the series of which it is a part. If you read the posts for the past couple of weeks on the Tucson Real Estate Market I hope you would see a balanced approach.
I know there are some that think all who write about real estate are just trying to justify why any time is a great time to buy. Regular readers here know that is NOT the case here.
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