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Voices Member,  in

Do you find that your buyers care about statistics, particularly shrinking inventory as it affects what they want to buy? Many of buyers don't

Asked by Voices Member, Mon Aug 29, 2011

listen I try to educate my buyers about what the inventory is doing in the areas they're interested in and why prices are going up or down. The MLS is what it is...cold, hard, available facts. What else would give my buyers confidence about current statistics, so that they can make better offers?

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I've found that our Cromford report that breaks the numbers down to zip codes has been helpful in showing them the facts. I'm having the same issue though. It seems they think our market is still declining due to the "shadow inventory" they read about. Some buyers have expressed that they'll wait because they've also read that prices will decline again due to the foreclosures yet to come. .
0 votes Thank Flag Link Mon Aug 29, 2011
I find most Buyers now feeling as though they are the professionals and try to lead the conversation. The problem is all the negative media. Few of the outlets care to publish the truth, the possitive truth. So the statistics they base their purchases on, in many cases, are incorrect.
*According to the Arizona Replublic:
a) 2011 is the first year of overall job growth since 2007.
b) Our current inventory is 2.9 months, the lowest since 2008.
c) In June 2011 Arizona recorded the highest number of home sales for any month in the last 10 years.
d) Interest rates are hovering at 4 to 4.25 on FHA.
Hummm, "maybe we should wait until interest rates go up to 6.25 again or until I get priced out of the market,"seems to be the general direction.
Funny how the buyers seletions, without changing preferences, get smaller and smaller yet they JUST heard on the news maybe they should wait another 6 months to a year.
1 vote Thank Flag Link Tue Aug 30, 2011
I agree with Larry . But I think it matters to your buyers if that is their focus- otherwise you come off like a car salesman. For example, some people don't care what all the houses are doing, they won't be buying all the houses. They just want one, so they care more what they are getting and that its fair. Telling them what everyone else is doing can be taken as pressure.

tl;dr Investors do, buyers not necessarily.
1 vote Thank Flag Link Mon Aug 29, 2011
Yes, it matters, and buyers need to understand it, especially now. Don, do you use the Cromford Report? If the answer is no, check it out. It is free w/our ARMLS Subscription. The Cromford Report shows a supply-demand index, and it features tons of stuff by zip code & city as well. Check it out.
1 vote Thank Flag Link Mon Aug 29, 2011
As an investor, (not a salesman), I also try and educate people about Phoenix real estate. Inventory has nothing to do with prices anymore. Supply and demand means absolute zero in 2011. Banks aren’t lending. They run the show calling all the shots with current home prices. Property prices are all over the place nothing is accurate or stable. The listing prices are a guess then posted on the MLS. One foreclosure on yer block and the comps numbers $$$ are all over the place. There is nothing solid anymore. Prices are a confusing disaster and so are the facts + figures. There is a foreclosure on every block. If not there will be one your block soon. Fannie Mae, HUD and all the rest of the banks have enough inventory foreclosures for the next 5-10 years. They will be spitting out these foreclosures for years keeping the prices at current cost. If they let all of them out the market would crash. Good time to buy if you’re lucky enough to get a mortgage. Banks aren’t in the business in lending anymore. Maybe the public should wait before buying a property until homes can be purchased on a credit card. Hate to say this. When you read anything positive about the Phoenix market it’s based on hype only. The happiness and excitement is soon changed back to reality. The market iskind of weird and dangerous.

Here are the things that won’t change in Phoenix for 8 years:
…Many more foreclosures on the way in the Phoenix area.
…Canadians are buying properties with cash.
…Phoenix is a really hot 110 degrees
…Layoffs coming soon
…Property taxes are increasing.
It’s not the end of the world and the sky isn’t falling. So take a couple days off from work. Drink a few Margaritas by a pool and relax. Stop over thinking about the Real Estate market. Take a vacation and enjoy life.

Read this =…

Investor Mike
Gilbert, AZ
0 votes Thank Flag Link Tue Aug 30, 2011
My buyers generally do care about statistics but don't necessarily understand them, so they ask general questions, typically, "what's the market doing?" which of course could be answered a lot of ways. What they mean, is "will this be a worthwhile investment and when will homes start appreciating again?" Those subjective questions are hard to answer so with statistics one can at least tell them what's happening right now, what the current trends are, and allow them to make their own decisions.
0 votes Thank Flag Link Mon Aug 29, 2011
Inventory is very low and my owner occupant buyers have lost enough homes due to multiple offers on them and cash offers winning out that they realize they need to come in with stronger offers and ask for less concessions. My investor buyers still don't want to believe they might have to pay close to or over asking and are trying to steal the properties. I have found the investor purchases are definitely slowing down because of it. I too use the Cromford Report and it has been very helpful.
0 votes Thank Flag Link Mon Aug 29, 2011
It's our job to protect them and provide the information up front but unless they have a good knowledge of economics they can't always understand how it will impact them. I find my buyers usually care more after if affects their ability to buy. For example once they've experienced a multiple offer situation or a newly listed house has an accepted offer before they can even schedule time to go see it, they generally realize that a high demand and low inventory situation means they can't procrastinate and they need to be very decisive if they want an opportunity rather than taking time to think it over as they would have in a normal market. Lately I've shared these experiences other buyers have had to put it in perspective.
0 votes Thank Flag Link Mon Aug 29, 2011
Unfortunately the most effective way is to be patient with your client and have them lose out on two or three deals.......Then they get the message........If you try and push them too much, they'll get pissed at you.

Good Luck!
0 votes Thank Flag Link Mon Aug 29, 2011
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