It was a Seller’s Market. Every time you ventured across the threshold of a new listing you had a pre-programmed list of questions already rattling around in your head: How many offers do you have? When are you accepting offers till? Are you going to issue multiple counter offers? What (besides the highest price that can be squeezed out of us wanna-be’s) is the Seller looking for? Incredibly short contingencies? A specific escrow officer? An absurdly long rent-back period? A non-refundable deposit in the form of my first-born child?
The underlying truth about all these questions was this – there was simply no question about who was in charge . Sellers said jump. Buyers rolled over and responded with a resounding refrain of: “How high?” They didn’t like it. But it was easy to justify. Put up with all this bullying of the buyer business and sooner or later you get to be a seller too. Then you’ll be in the driver’s seat of the bus everyone else is chasing. Payback time gets paid forward.
So here we are on the other side of the inside-out Real Estate Universe. It’s a Buyer’s Market – or so everyone is telling us. And in a Buyer’s Market, all the opposite things are supposed to be true. It’s not how many offers do you have? It’s have you had any offers at all? Even a low-ball one, way back when you first went on the market, four months ago and now feel stupid for not taking it? It’s how motivated are you? It’s how much stress is there, getting swept under that freshly vacuumed rug or stuffed behind that neatly staged couch or hidden in the recesses of that way-too organized closet? It’s when are you going to lower the price again dummy? And it’s are you ready for all the extra grinding I’m going to do even after you end up accepting my insulting offer over all your own worst gut-wrenching objections?
And yes, in an ubiquitous Buyer’s Market, it is some of the above, some of the time. But to the growing surprise of many, it isn’t all of the above all of the time.
In fact we are seeing things that we aren’t supposed to be seeing in a Buyer’s Market. A series of odd apparitions. A surprising number of multiple offer situations cropping up all over the landscape. Not on every house. Not in every neighborhood. Not across the monopoly board in every single price range. But they are there in numbers far greater than one would have expected, given the hope and the hype that Buyers in a Buyer’s Market can’t help but buy into.
Strangeness in a Strange Land. Multiple offers don’t belong here. Buyers aren’t supposed to be competing with other Buyers. Not now. Buyers are supposed to be sitting back. Taking it easy. Biding their time. Waiting patiently for it all to get sublimely worse. They shouldn’t be in a hurry to get anywhere. They should be drinking lemonade. Lounging in the lay-z-boy. Indulging in a some righteous channel surfing along with a bit of slow and disinterested MLS surfing. While all those anxious Sellers grow more and more desperate by the day and the hour and the minute. Buyers just aren’t supposed to be duking it out with other Buyers for the privilege of purchasing a property in a Buyer’s Market!
So what gives? Why is this happening? Who or what is rewriting the rules of how this is supposed to work? Why isn’t this the golden age of the real, first-time Buyer, like it was in 1994 when over half of the sales involved Buyers who had never owned a home before. Those fortunate Buyers who watched in awe as a wonderful window of opportunity opened up for them that they thought had been closed forever by the peak of the market in the late 1980’s.
Why isn’t this a better market for move-up Buyers? It should be. When prices are going down, there should be better demand for lower priced homes, while higher priced homes, larger and better, get disproportionately softer and more attractive in price. Move-up Buyers should be gaining on the changing market right now, specially when interest rates have remained so artificially low.
And yet. And yet. These aren’t the Buyers that are being welcomed with open arms into this Buyer’s Market. At least not enough of them. Next week, let’s examine some of the shadowy substance lurking behind the scenes. Is this what happens when banks have too much control over both sides of the marketplace? A stranglehold on both supply and demand?