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Jonathan Bow…, Real Estate Pro in Dorchester, MA

Where are all the buyers?

Asked by Jonathan Bowen, Dorchester, MA Tue Jul 10, 2007

Am I being facetious? A bit. But I do have some great listings and there just isn't much interest! It's very frustrating!

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There are definately seasonal trends in Real Estate, but if you think of the market as a ball rolling down a steep hill and the seller as the person chasing after the ball trying to stop it (get their home sold), you can surmise that it will be a very long time before the seller ever catches up to the ball, let alone stop it. As Real Estate Professionals we have a responsibility to educate our sellers so they have the knowledge to run past the ball, get in front of it, and stop it (sell their home). In other words, we must educate our sellers on pricing! If they want their home to sell it can't be priced the same as the numerous other similar homes in their market; it must be competitive!!! Competitive equals lower, low enough to stand out! Many sellers also don't realize that when they refinanced and pulled out cash causing an increase in their mortgage balance, essentially that was the equity they would have been paid for a sell today, they just got it in advance. This market doesn't generally allow sellers to "get paid twice". Get those homes priced right and they will sell faster.......Go Team!!!!
2 votes Thank Flag Link Tue Jul 10, 2007
Where are the buyers? Right here.

We relocated to the Boston area in December 2006 and have been living in a furnished rental and paying for two storage units since. We thought for sure we would be in a house within months as we were in a "buyer's market" and are dual-income pre-approved buyers with no contingencies. We've been actively searching for a home, and have lost out twice on offers in which we were unwilling to enter a bidding war over properties that were overpriced to begin with. Within the (very) broad geographic area in which we've been searching, inventory generally is plentiful -- but not when it comes to well (fair)-priced homes.

A lot of the homes we've looked at were purchased at the height of the market and sellers are unrealistic in their expectation to make a large profit, or, unfortunately, many are just hoping to break even. Even with the sellers already taking a loss, a lot of the homes out there are just not worth the asking price. Many need updating, but are priced as though move-in ready -- any necessary work done to the house then puts it over its current value.

We did not make the profit we had hoped for when we sold our home in California, but we took the first (which is often your best) offer because (gasp) we actually wanted to sell our house. If sellers truly want to sell, they need to be realistic and understand that this is not the market of two or more years ago.

Last week we withdrew an offer on a new construction home in which we were already conceding to finish certain things ourselves at an estimated cost of approx. $20k, but even then the builder was stubborn in negotiations – for a house had been on the market more than 300 days and on which we were the first offer. At $40k below the asking price, I would not call our offer "low-ball" - particularly considering our ability to close in less than 30 days and concession to finish work.

That, combined with the recent mortgage industry news, propelled us to rethink our position and choose to pull out of the market entirely and we're currently looking for an unfurnished rental property in which to wait it out. Are we making the right decision? Hard to say without the benefit of hindsight, but if the MA market follows the path of the So Cal market, I think that prices here have further adjustments ahead. I know other buyers who have recently decided to take a similar path, so it will be interesting to see the affect on the market after the dissipation of the wave of buyers taking the opposite approach (i.e., "get in while you still can").

There are so many houses on the market that have been listed for more than 100 days and have not reduced once that I can't help but wonder if this is driven by the sellers or the agents representing them. I would hope that agents are attempting to convince their sellers that their outdated home on a busy street is not going to garner the same price their neighbor's home did a year ago. It’s a bummer, I know, but timing is everything. Also, most listed homes could greatly benefit from even some minor staging (as mentioned in a previous post). I am in awe of the average home on the market. I marvel at the design decisions and wonder where their realtor has been and whether or not they have cable access (HGTV, anyone?). I would estimate that at least 50% of the homes out there could cut their time on the market in half if they put some belongings in storage, repainted, and put a little thought into how their home is being perceived by buyers. Most buyers can't look past all the clutter, toxic pink walls, or rooms crowded with furniture to see a space’s true potential. If you have a seller who is resistant to a price drop and has the luxury of time (as most seem to), I suggest working with the seller on staging their home first. If that doesn’t make a difference, then they can drop the price.

One last tip: When taking photos for the MLS, please focus on the actual house. The internet is a great tool and we as buyers completely rely on it, but it can work against a seller. I look at real estate listings daily, but it never ceases to amaze and amuse me as I peruse listings to see multiple photos of furniture, stuffed animals, rugs, pictures, etc. -- last time I checked, I was interested in buying your house, not Aunt Gertrude's throw, your belongings or your pets! Although your landscaping is beautiful -- how about a shot of the bathroom? And if there's a valid reason for that, how about a price drop?

To answer your question -- this is where your buyers are. As agents, please work with your sellers to bring us something that's presented well and fairly priced -- and we will actually buy it. Most of us are qualified, we want to buy, and we're ready to buy...but we're just not going to buy that...at that price.

Unless something changes, see you next spring after the March mortgage adjustments!
9 votes Thank Flag Link Sat Aug 11, 2007
good morning, there is still a very healthy supply of buyers out there. The three "basics" that continue to be important are pricing, staging and marketing. As many have said before me, correct pricing is a primary driver of having more buyers coming to any property for sale. Staging has continued to garner more attention and deservedly so, as the "cost vs. return" of correct staging is exponential in terms of buyer activity and selling. Staging has become increasingly important with the advent of virtual tours and mulitple photos on internet sites and the MLS. The internet and the MLS are the first two steps in the third item which I mentioned which is correct marketing. Not just any marketing, but "correct" marketing which can have some variations based on different locations/parts of the country and your market. Again, some marketing basics are almost always appropriate including clean, professional yard signs that are standing up straight, internet web site placement including Realtor.com with multiple photos (they now allow 25 photos there instead of just 6), professional brochures/fact sheets at the property, a fully filled out and completed MLS input. We could spend a long time regarding more, other and different marketing techniques-- but at a minimum, have these things done and done well. Good luck! My best, John Allaire
4 votes Thank Flag Link Wed Jul 11, 2007
They will come when they feel the price is right for the property.

As challenging as this market has been, there is yet another twist. We're seeing buyers with good credit scores and pre-approvals from their mortgage brokers losing money because the lender decided to get out of the mortgage business.

George Antonopoulos
Realtor
Coldwell Banker Residential Brokerage
800.759.6936
Madison, CT
Web Reference: http://www.shorelinere.com
3 votes Thank Flag Link Tue Aug 7, 2007
I am one of those potential buyers who are renting. All my friends who finished grad school a couple years ago are waiting until we see signs that the market has stabilized. It has not. There is more inventory then last summer. Yes, some houses sell when they are "discounted" from last year's prices, but we are a far way from reaching the bottom of the housing cycle. I've seen this happen before. I am the son of a builder who lost quite a bit in the real estate slow down that came in the early 90's. No, I'm not buyng what the realtors try to push. Still overpriced, definitely another 10-20% decline in the works (yes, I'm talking percent). Can't wait to see the price reductions that come at the end of the summer...after all, it'll be a long winter for all those sellers willing to ride this market all the way down (a very sobering experience).
3 votes Thank Flag Link Tue Jul 10, 2007
We have less demand because over price listings and because mortgage programs have changed. Before, any buyer with a fair credit could buy a home with little income documentation and no money down. Now with the increased of foreclosures banks are more strict. Now a fair credit buyer has more difficulty to get approved and to afford. Only right priced houses are selling in this market, my advice will be take the time to educate your sellers on market condition and real estate agents should take much caution when pricing a home, we have too much supply and little demand to make this kind of mistakes. And remember: "BUYERS WILL BUY, IF THE PRICE IS RIGHT!!!"
2 votes Thank Flag Link Tue Aug 7, 2007
Where are all of the buyers? Trapped in overpriced listings! There are buyers coming through my listings, but many have a house on the market that they cannot sell. In most instances they are clinging to unrealistic price expectations.
Web Reference: http://www.RayandPaul.com
2 votes Thank Flag Link Sat Jul 14, 2007
psssst, Jonathan
ssshhhh, that was supposed to be a secret
there are no more buyers
1 vote Thank Flag Link Wed Mar 19, 2008
Hi Jonathan.
.I think every market is different but overall you have heard from a number of buyers who are essentially saying the same thing.. they are not going to buy anything just because it's there. I am working with buyers who are well qualified but the don't want junk . They want it in good condition. They do not want to get into multiple offer situations. They will not pay more then they deem to be market value. Most have set a realistic figure about what they can afford and plan to stick to it.
They are concerned about where the market is headed but are willing to buy because they have realistic expectations. They do not expect to make a profit in 6 months. They know what they buy today is something they will live in for at least 5 years.
So where are the buyers... they are everywhere..
1 vote Thank Flag Link Tue Aug 21, 2007
Kaye Thomas, Real Estate Pro in 90266
MVP'08
Contact
I am the manager of a nationwide Brokerage company in California and one of your responders to this question is an agent in my office. I'd just like to say that it's great to see that some of our training is paying off and that our attendees are listening to what we are saying, and based on the agent's response, this agent did just that.

We hold a minimum of 7 training events per week in our office and much of that training right now is on PRICE REDUCTIONS and SCRIPTS/DIALOGUES. In our area of Southern California, we are experiencing approx. a 30+% decline in sales from 2006 and with listing inventory almost double from last year, buyers are able to be more selective. Bottom line...if it's not priced right, it will not sell!! There are buyers our there, but those over priced listing are not ever going to see them because why should a ready, willing and able buyer look at a home that is $20K, $30K, $40K or more over priced, with so much inventory to choose from. Only 4% of our listing inventory is selling right now (in our area), so I would be asking my sellers, "Mr. and Mrs. Seller, do you want to be in the 4% of homes that are selling right now, or the 96% of homes that are sitting?"...and then be quiet...let them self discover their answer. Also, KNOW YOUR NUBMERS. We can not educate our selles if we as agents don't know our DOM, Avg. Sale Price, Inventory, Percentage of homes selling, etc. In this market we are EDUCATORS, not sales agents. The sales will come if you do your home work and work with the MOTIVATED and REALISTIC seller(s). It's all about PRICE and the sellers MOTIVATION for moving. If they are not motivated sellers....my answer would be NEXT!
1 vote Thank Flag Link Mon Jul 16, 2007
My question is, with all the inventory sitting WHY ARE BUYERS WAITING TO BUY? This is THE time to make a purchase. You want to wait for what? Rates to go up? the days of the 5% mortgage are over. You had better jump on the band wagon while you have some room to negotiate and can still get in under 7%
1 vote Thank Flag Link Sat Jul 14, 2007
Very simple. I'm in Mansfield, MA - next door to Easton, MA, where the question came from. A nice house with a yard and garage on a quiet street is what we're looking for... How much does that cost in Eastern Mass - easily over $400K, if not $500K (we're looking in Marshfield, MA). Now ask your self, who can actually afford that? Certainly not first-time homebuyers. First, you MUST have two incomes - my wife and I both make decent $$$ and have owned a home for 2.5 years (hasn't appreciated, if we get back what we paid - $325K, we'll be lucky) - but we're stuck on a busy street and are finding it very difficult to make the move to the house we want to stay in for the next 30 years. There is going to have to be a HUGE market correction because home prices have increased so dramatically over income levels over the last 10-15 years. I foresee a massive drop still to come.

Just my two cents...
1 vote Thank Flag Link Sat Jul 14, 2007
Buyers inquiries have been down the last few weeks. That is consistent with seasonal trends. Spring is always much busier than summer. Buyers are out there, but move cautiously and want a 'good deal.'
Web Reference: http://PeninsulaFirst.com
1 vote Thank Flag Link Tue Jul 10, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
I'm not as confident as Alex about waiting for a market correction, but I'm a home buyer and frankly in no rush to buy at the moment.

Seems that the market has a way to go -- and while I know I can't perfectly time the market...my personal observation is that list prices are stabilizing...perhaps on the way down! If I'm wrong in the short term...well, I'll likely buy in the next year and it's hard for me to believe that the 1-year appreciation will be great enough to make me regret my decision.
1 vote Thank Flag Link Tue Jul 10, 2007
They are here in Texas but very picky in all price ranges. Very few seem to want anything that needs even the slightest amount of updating or upgrading. If the houses look good though and they are priced fairly, they tend to sell fairly quickly.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Tue Jul 10, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
A real estate economist by the name of Ted Jones (Stewart Title - San Diego event) I heard early this year said it plainly, "Sellers in this market will simply have to sober up." We witnessed it first-hand with our neighbors who recently reduced the price of their home by 9% and interested buyers appeared like magic. Realtors will also want to provide ListingCards to their sellers, who up until now don't have a method of promoting the sale of their home when they meet friends, family and coworkers in person. Visit ListingCard.Net
Web Reference: http://www.ListingCard.Net
1 vote Thank Flag Link Tue Jul 10, 2007
There isn't much interest because buyers have too much to choose from, too many choices, your listings have to stand out from the rest, what kind of exposure are you getting , are you choosing proper tools of advertising?
I have been to open houses lately that 20 or 25 people show up.
0 votes Thank Flag Link Mon Mar 24, 2008
As long as your marketing efforts are continuing and your prices are in line with the current market conditions, they will come. Just keep listing!!!!
0 votes Thank Flag Link Wed Mar 19, 2008
Buyers are out and about...this week my showings are up 25% on all my listings...and this is the week before Easter!
Web Reference: http://www.JayMcHugh.com
0 votes Thank Flag Link Wed Mar 19, 2008
In my car!

I'm swamped right now and you will be too since buyers are FINALLY waking up to the many excellent opportunities to get into a house for a reasonable price. The tables have finally turned and wise buyers know this.
0 votes Thank Flag Link Tue Aug 21, 2007
I think Buyers are listening to all the media about home prices will continue to drop. They are waiting for the bottom. They have lost trust in the system especially with stories of Buyers losing money because their mortgage company went out of business. Fear is what appears to be going around.
Buyers are in a wait and see mode.
Those Buyers who have to buy now are asking for the sky because the market is over stocked with inventory. In some cases I have herd thay they had a three year supply at the current sales rate. What worked last month will not work this month. Good Luck!
Web Reference: http://www.ChrisRoark.com
0 votes Thank Flag Link Tue Aug 21, 2007
I agree with John, Realtor.com is a helpful in terms of placement; it's also a good reference point for sellers.
0 votes Thank Flag Link Tue Aug 21, 2007
I have actually been talking to a lot of buyers. I think the problem is that there are so many options that people think they are going to find the perfect house. You know exactly like their old house only cheaper, smaller, newer and in a better location. I think people are almost over whelmed by the market. On top of that with all the news out there they think they can find a great deal somewhere. You know the famous question; “I want something really under priced that I can fix up and sell for a profit.” duh, that’s what everyone is looking for.
0 votes Thank Flag Link Tue Aug 7, 2007
Most buyers have been watching rates go up..but they are starting to come out and make offers.....Jay
0 votes Thank Flag Link Tue Jul 10, 2007
When the price becomes attractive, the buyers seem to crawl out of the woodwork. By asking this question, it seems that it may be time to do some soul searching and make some hard decisions
0 votes Thank Flag Link Tue Jul 10, 2007
In Wilmington Delaware the buyers are looking. They just don't have the sense of urgency that they experienced over the last few years. They are now looking, comparing, looking at what sellers paid for their property originally and making a financial decision.
0 votes Thank Flag Link Tue Jul 10, 2007
The Woodlands / Magnolia, Texas area is HOT! We don't have enough homes for all the Buyers. Some Buyers are actually on a waiting list for a home to go on the market.
0 votes Thank Flag Link Tue Jul 10, 2007
I am starting to see them coming back out in Central Mass., however we are much more affordable here.
Web Reference: http://www.REALTYMAN.com
0 votes Thank Flag Link Tue Jul 10, 2007
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