Williamsburgs Real Estate Blog and more!

It's been awhile since I wrote anything on this blog, and a couple of months since I've written on some of my others, but I wanted to make sure to pass on some recent observations about buyer and seller behavior I've been witnessing.

First and foremost, if you haven't heard, the last 24 months have been pretty bad for sellers hoping to sell fast, not to mention-close to their "wanting" price. I say "wanting" because that's usually a sellers starting point before you get to the asking price, then begging price, then the give it back to the bank price.

Buyers, during this time have been a little reluctant to commit to a purchase. They also have a price range. The buyer usually starts with a "wanting" price, then an offering price,followed by the "that sellers on drugs price but my wife really likes the granite countertop so we'll offer to steal it price".

What I've noticed recently though is that buyers-some-have waited a little too long to get started. Ive witnessed 3 or 4 homes in the last week that buyers wanted to write offers on, hesitated, and now that they've decided to write, have found out someone already did and the home is no longer available. Awhile back I pointed out that while there are a lot of homes on the market, there are few disirable ones.

If you are a buyer and have looked at 20 homes and only found 1 that was desirable, so did 20 or 30 other buyers. If you wait to write the offer, chances are you will be competing with hopefully only one other offer. You might find yourself completely out of luck. If you are looking at a short sale or foreclosure, you are likely to find out the sellers have submitted one or more offers to the bank already. You might be competing there as well.

Sellers are getting offers more frequently again, they are certainly having more showings which makes them more optimistic about their chances and they will be less likely to "give" it away.

Interest rate increases are still an unknown. Certainly they've only gone up in the last six months and are likely to continue their climb. The government will discontinue buying MBS in March, Fannae Mae and freddie Mac will tighten credit and lender standards further and FHA will be hiking PMI rates. Affordability will diminish at the same time demand increases. The end result may be that sellers will have to price their homes properly and perhaps aggressively in order to sell. Perhaps they will just stay put and wait for the next correction. If that happens, supply will diminish, demand might stay the same or taper off a little. But the reduced supply will most likely create competition once again.

If you think it's hard to give a seller or buyer the right advice, you're right. What I tell buyer A may be totally different than what I tell buyer B. Likewise, seller A may have a drastically different situation than seller B, so their advice will be different even though the market for both is the same.

The bottom line? Follow your REALTORS advice. Be honest with them about your needs and situation. They will help you make the right call. Listen to the national or even local media, but do not think they are more reliable than your local REALTOR.

Jim Mellen,Licensed in VA,RE/MAX Peninsula at New Town REALTORS. All rights reserved Feb 2010