Is it a buyer’s or a seller’s market? The debate has raged on for months, and the battle out on the lines looks to be getting uglier.
There’s this from Kent Gagon, a realtor from Gilbert, AZ- NOW is the time to buy, with builders offering HUGE incentives on spec homes (including pools, money towards upgrades, gift certificates to furniture stores or new cars,) and resale sellers negotiating there may not be a better time than now to make your move.
Steve Larrimore, a Wilmington, DE realtor has a different view- While some are yelling “Buyer’s market!” like a battle cry, a market rarely goes from a sellers market to a buyers market without at least a stop in the balanced-market area, which is where we are or are approaching now. There is also no reason to expect that we will even go to a buyer’s market.
So what really makes a market a buyer’s or seller’s market anyway? All the “how many months a house spends on the market” stuff aside, I suspect the real world definition of a buyer’s or seller’s market would be “the party that market conditions favor.”
With prices still at historically high levels, it is hard to declare that we are currently in a buyer’s market. While buyers have lots to choose from, they are sitting on the sidelines. Prices remain unappealing.
Conditions couldn’t be said to favor sellers though. The current high prices are only helping the few sellers who manage to sell. It doesn’t help the rest of them, if the odds of selling at current prices rival the odds of winning the lottery.
A “balanced market” would be when buyers and sellers are at some sort of equilibrium- balance achieved between the two. The large number of sellers to buyers though, means this term doesn’t apply either. None of these terms-buyer’s, seller’s or balanced define today’s housing market.
What we have now is not balance- it’s a standoff- with buyers and sellers hunkered down in the trenches. The housing bubble has brought on a new kind of market- a “No Man’s Market.” The battlefield has become so perilous with poison loans, negative equity, high prices and rising foreclosures- buyers are afraid to venture out. Sellers, remembering the glorious battles won by neighbors last summer, are loathe to retreat off their lines.
Sellers have starting running up white flags. According to the East Valley Tribune, In the past few months, home builders are finally beginning to respond by lowering prices to get rid of inventory. Some sellers are finally starting to realize their asking prices are too high and are cutting them.
So far buyers have been unimpressed, and have been waiting in the bunkers in droves. Now however, there is a new battle cry from Catherine Hockmuth encouraging a full frontal assault:
Stop being passive. Be a shark. It’s a buyer’s market. If this bubble is going to burst, let us bring out the needles.
I’m calling on all buyers and wannabe buyers to join forces in a boycott against overpriced homes. That means stop monitoring price reductions and start marching right up to the front door and setting your price. Chances are good that they’re not getting many other offers.
And I’m not talking about offering $20,000 or $30,000 below asking price. I’m talking low ball. You know that house you’ve been eyeing. The three-bedroom, 1,200 square foot, 1920s house listed for $700,000 — the one that’s been on the market for five months. Offer $500,000. $400,000 if it needs a facelift. $350,000 if it needs major reconstructive surgery.
A buyer’s market? Sellers? Balanced? Not Hardly. This is a “No Man’s Market.” Wear your Kevlar vest.