The Real Difference Between Buyers and Sellers

By
Real Estate Agent with Real Estate West BRE# 701315
http://actvra.in/rhZ

 

 

 Buyers and sellers have always been at opposite ends of the table.  When the market is moving upward sellers want multiple offers and push buyers for every extra dollar they can get.  When the market starts trending downward buyers will withhold offers until they feel they can negotiate a price that is at or below market value.  Revenge can be sweet!  However a recent survey may hold some clues about the  difference between those who own a home and potential homeowners.

In a recent  Survery by the Pew Research Center. Homeowners were surveyed about where they believe home values are headed.  Of  those surveyed 55% of sellers believe the value of their homes will increase modestly over the next few years, 10 % believe it will decline  and 26% believe their home's value will increase substantially.  I guess the other 9% have no idea what's happening.  But it is interesting to note that even with the current declines in prices in the US housing market over 80% of sellers are upbeat about home values. 

Buyers, on the other hand, may be mirroring similar numbers but with different results.  That is most believe  or perhaps hope prices will decline a lot over the new few years, some think prices will only decline slightly and a few believe prices will continue to increase. And again 9% have no clue.

What this may point out is the real dichotomy between those who own homes and those who don't is how these people view the future of housing.  People who own are far more optimistic that their homes will increase in value even if not at the phenomenal rates of the last few years.  People who don't currently own a home seem more pessimistic about ownership in general and values in particular.  It may be that some potential buyers just aren't willing to take on the committment of homeownership unless there is a big profit at the end. For these people homes are more then shelter they are their financial future. Or it just may reflect a difference on how these groups view life.  Some will always see the glass as half full and others see it as half empty.

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Rainer
262,055
Teresa Boardman
Saint Paul Home Realty - Saint Paul, MN
Nice post.  I am seeing a lot of buyers waiting for something.  I get my sellers to reduce the price and the buyers come in with a super lowball  offer.  It has been a sellers market for so long that I think sellers are being punished for the past.
Dec 09, 2006 02:34 PM #1
Rainmaker
451,192
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

For nearly three decades an acceptable rate of appreciation on a home was 6.5%.  Then the "boom" of 2005 hit, multiple offers low inventory (here in Florida) and home prices went "nuts" .

For investors getting a 20% return before the boom as great now they are looking for 200-300% return on their investments. The problem is with so many homeowners arriving to the party late, the buyers have moved on. We went from ahving 1200 homes available for sale at the start of the housing market Rush that would be sellers who arrived late found themselves in a market of 7000 homes for sale compared to this time last year. Closings conversely have shrunken to minisule percentages with news that foreclosures are on the rise.

Buyers now are making lower offers and some foolish ones think the market will continue to sag- the bargain shoppers. But, it fairly safe to say the market has corrected, and is correcting, and home values are equalizing. The longer they shop the sooner they will realize what fair market value is.  I hope!

Dec 09, 2006 03:15 PM #2
Rainer
29,086
David Recker
Connect Realty - http://www.NCRealEstateWeb.com - Rocky Mount, NC
Nice post, thanks for sharing your thoughts! I believe that the market will balance out in 2007 with buyers and seller having a more realistic view and expectations.
Dec 09, 2006 03:23 PM #3
Rainmaker
375,180
Leigh Brown
RE/MAX Executive Realty - Charlotte, NC
Broker/Owner - Charlotte NC
i like a balanced market, myself.  what's interesting to me is that the folks who are lucky enough to sell out of the quiet markets are coming here to Charlotte NC with the hope of making those 200% returns of the 'bubble' in other areas...and we're projecting 9% for 2007...but it's hard to adjust expectations.
Dec 09, 2006 03:35 PM #4
Rainer
47,504
Jolynne Photography, Creative Wedding Photography, Family Portraits, Bar Mitzvahs
Jolynne Photography - Hemet, CA
Bat Mitzvahs, Senior Pictures, Event Photography

In many cases, the buyer and the seller are the same person.  The home that they want sooo bad is clearly overpriced.  The one they want to sell is undervalued!

Dec 09, 2006 04:27 PM #5
Rainer
47,504
Jolynne Photography, Creative Wedding Photography, Family Portraits, Bar Mitzvahs
Jolynne Photography - Hemet, CA
Bat Mitzvahs, Senior Pictures, Event Photography

In many cases, the buyer and the seller are the same person.  The home that they want sooo bad is clearly overpriced.  The one they want to sell is undervalued!

Dec 09, 2006 04:27 PM #6
Rainmaker
111,716
Carl Guild
Berkshire Hathaway Home Services New England Properties - East Hampton, CT
Central Connecticut Real Estate
Good post Kaye. I have been on both sides of the table Hopefully in 2007 things will be a bit better :)
Dec 09, 2006 04:30 PM #7
Ambassador
738,837
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Kaye.... I agree with Leigh... I love a balanced market... overall,for me... it doesn't matter where rates are..... who's buying... more sellers than buyers or vise versa...reason being.  I just network and my referrals keep me busy.

Overall....these clients as you mentioned.... sellers trying to get the price pushed upward or wait it out...  buyers, trying to get a better price... sometimes comparing a price of a great house to that house that is no so great....but think the sellers should come down.

Looking forward to 2007 also... 

Dec 09, 2006 07:16 PM #8
Rainer
99,630
Kaushik Sirkar
Call Realty, Inc. - Chandler, AZ

Compare it the stock market.  If I own a certain stock, I'm likely to be bullish on it.  But if I don't, maybe I'm waiting for the stock to drop some more before I buy!

Like a couple of other posts have said, why oh why can't we just have a perma-balanced market??? :)

Dec 09, 2006 07:30 PM #9
Rainer
61,226
Netta Blackwood
La Rosa Realty - Kissimmee, FL
REO/BPO Expert

Aa ah . . . this is so true. Now that the cards are in the buyers hands, they tend to play a little harder. This is causing lots of sellers to feel the brunt of these buyers decision. Unlike earlier markets, it is worst for the sellers now who might seriously need to sell. Next year might be too late for some of them.

Dec 09, 2006 08:05 PM #10
Ambassador
1,833,884
Jeff Dowler CRS
Solutions Real Estate - Carlsbad, CA
Carlsbad CA Homes for Sale (760) 840-1360
Great post. It is always interesting to note the changes that ocur in buyer and seller perceptions as the market shifts. I think we are finally starting to see buyers becoming more comfortable with the idea of buying, since the prices here are now shoing much of a changea dn the hoped-for bublle burst has not occurred. Many sellers seem to be getting the idea that they must be more realistic about their pricing, although some are still out in the stratosphere. It will be interesting to see what happens after we get through the holiday slow down and into the spring market.
Dec 09, 2006 08:31 PM #11
Rainer
23,467
joanne Douglas
Terrie O'Connor Realtors - Ridgewood, NJ
It's difficult to determine why buyers are having trouble pulling the trigger but more and more I find people waiting and waiting.  So far only a few have lost out on a good deal but for the most part their waiting doesn't seem to have hurt them.  

It will be interesting to see what happens when the sellers begin to sell...they will then hafta buy and since they'll be in the same market it should level off and become more 'normal' I don't have much experience with the market but I'm learning a lot!
Dec 09, 2006 09:43 PM #12
Rainmaker
144,641
Harper Team
J Rockcliff Realtors - San Ramon, CA

The Power of NOW

Waiting for the right time often results in 20/20 vision - looking back and seeing many right times and good opportunities missed because one was hoping for something perfect instead of... 

Dec 09, 2006 11:37 PM #13
Rainmaker
621,751
Randy Prothero
Island Style Realty Inc. - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Kaye - Great topic of conversation.  Buyers and sellers do have one thing in common.  They both want the home to sell.  We get the big bucks to bring them together.

Dec 10, 2006 12:40 AM #14
Anonymous
Anonymous
Mikey

If you look at Economics 101, the price of something is what a buyer is willing to pay.

If buyers and sellers are still out of whack this suggests there will still be a period of lower home sales until this fundamental imbalance is cured.

Dec 10, 2006 04:52 AM #15
Rainmaker
199,765
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Director of Property Management
Kaye, Thanks for the post. Buyers are more savvy today and I agree, it is not just about a roof over their heads. It is also about building wealth for themselves and their families. The paradigm you laid out with regard to this market is nothing new and as is the natural order of things, it will correct itself. As Kristal Kraft has pointed out in REALTOR...It's NOT about you!, stay focused on the Consumer Centric Model and you will ride the curve.
Dec 10, 2006 08:07 AM #16
Rainer
44,805
Michael S. Mackey
CENTURY 21 All Islands - Mililani, HI
REALTOR ABR, CRS, GRI, RSPS
Greta post! If buyers and sellers had crystal balls, would the seller's make the same predictions as the buyer's? Kaushik's comment sums it up nicely.
Dec 10, 2006 12:33 PM #17
Rainmaker
137,392
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA

Everyone: Thank you for taking the time to comment..it is intersting to note that much of what we see in our local markets  in the responses of buyers and sellers is reflected in  markets nationwide...I think we are seeing an evolution in the concept of homeownership...

.Allison Stewart points out.. expectations in appreciation may have been permanently changed by the run up in prices in the last few years.. And as Randy Prothro shared everyone wants to get the big bucks when a home sells.  I believ Joey Aszterbaum states.. your point of view definitely changes depending on the hat you are wearing.  Leigh Brown and others are wishing for a return of a balanced market but I wonder if we will actually see that again ... people have lost the concept of a normal market where you buy a place to live and stay there for a period of time before  moving to the next home.  As the Harper Team ponts out a good deal is often subject to 20/20 hindsite

 

Again thanks to all for your views and insight..

Dec 10, 2006 02:32 PM #18
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Rainmaker
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Kaye Thomas

e-PRO, Manhattan Beach CA
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