Things have noticeably slowed down in the past year, with home buyers hitting some invisible wall about mid September, but many Real Estate Buyer's fear today's prices will seem way too high tomorrow, so they're sitting on the sidelines.
People simply will stop buying, When the difference between what buyers want to pay and what sellers wanted to receive widens dramatically.. and then some homes couldn't find any buyers at all.
Buyer’s strikes aren't one-day phenomenon, but neither do they stretch on for months. The strike ends when buyer’s think they again know what homes are worth and stop sitting on their hands in fear that any price they pay today will seem like way too much tomorrow.
This one will work itself out over the next couple of months as houses, jobs lay offs, stocks, bailouts and confidence, that are the focus of media right now, subprime mortgages (US), government guarantees of Banks, work out for the auto industry and the debt used to finance buyouts and housing prices themselves.. get re-priced.
"Re-priced" "Price Reductions" "New Price" is all real estate jargon for "reduce the asking price until they find a Buyer at the new price."
Buyers strikes end when buyers become satisfied that today's prices accurately reflect the risks in the market. Prices get marked down. More homes selling at those prices reassures home buyers that those prices will stick. And with trust in prices restored, buyers return to the market.
So what is a buyers strike?
In an orderly market, the price of homes and condos may be moving up or down, but the difference at any one moment between what buyers want to pay and what sellers want to receive is relatively small. This is reflected in the modest annual increases that continued in the Toronto market ’99 – ’05 (gains of 3-5% in excess of what might be earned on your Canada Savings Bonds)
What causes such a buyers strike?
Think of it like deer-caught-in-the-headlights moment for the home buying market. Buyers are so uncertain about the validity of current prices that they freeze into inactivity, buying nothing, until they think they can trust prices again. FUD see previous entry
Why would anybody buy real estate assets now, right now? Stability. Opportunity. If you own a home now that is almost paid for, your opportunity to move UP into something better, either by size or neighbourhood, closer to your place of employment has never be better.
That said, maybe my background from the financial services sector makes me too analytical.
Homeowners with better credit ratings but with challenges such as an the inability to document income, might need to be more forthcoming with details and disclosures to obtain financing, but those with solid employment and credit histories can obtain great deals on financing!
If you are sitting on the fence about when to step into the west Toronto real estate market and are considering the sale of your property, I would like to meet with you.