This is my “feel it in my bones” reflection for the day. Buyers are generally ready to buy. We keep talking about how the sideline sitters, sensing impending doom, are waiting for the bottom to drop out of pricing before making their move. What I saw this weekend suggested that, while the tide is certainly not turning, many buyers are ready to take a dip. The one open house we held (only one in respect of the Chargers’ home game) was well attended, and buyer interest was high. Showings across the board picked up slightly, and we even put one listing in escrow. This all belies the pervasive bubble sentiment that our market is headed for the Apocalypse.
Before the sellers out there break out the party hats, however, please keep my upbeat assessment in perspective. We are still in a declining (or “softening”, “adjusting” for the faint of heart) market, and buyers are looking for a deal. I got this funny bone tickler yesterday in response to a showing feedback call made on one of our listings: The buyers thought it was too nice; they are looking for a fixer. I gratuitously offered to go trash the joint to provide the added “value” they desired, but I’m afraid the damage had been done. They had already viewed the home, seen the remodeled kitchen which cost tens of thousands of dollars, and witnessed the results of the seller’s years of attentive maintenance and of our professional staging. Nothing I could say would convince them that this wasn’t a lovely home.
The point is that the buyer, like most buyers in this market, are looking for a “deal”. Many times it is a deal based on the Zestimate that is tucked under their arm, or a deal based on the list price (with no consideration of how the price might relate to true market value). You want “$X”? I will only pay “$X minus 10%”, because the media tells me I can. In this case, the deal was an attitude on the part of the buyer that the ugly, older, neglected house offered opportunity for appreciation that the nicer, well-maintained listing did not. This is not an inherently flawed logic, of course, assuming that all other factors are considered. However, here is how we (approximately) stacked up against their first choice:
Us: 2150 square feet, 4BR/3BA, $40,000 kitchen remodel, hugely expensive free-form pool/spa, immaculate, approximately $700,000.
Them: 1500 square feet, 3BR/2BA, no udating or improvements, in need of fixin’, approximately $600,000.
Now I must assume that affordability was not an issue, as once the fixer is “fixed”, the cost to the buyer would be strikingly similar, nor was location (similar neighborhoods and ages). It was simply their perception of a deal. So, sellers, here is the deal. Buyers are out there, and buyers have as many psychological profiles as they do choices in homes. The common trait is that they will buy when they perceive value, and their perception is their reality – and yours.
(Edited to add a link to the DataQuick numbers for San Diego County, Sept. 05 vs. Sept. 06, since Jack brought it up in his comments).