Interestin​g stats about Buyers and Sellers

We are hearing complaints from sellers these days regarding low ball offers submitted by buyers. It appears that there are many buyers who are either sitting on the sidelines expecting prices to drop excessively, or placing offers at considerably less than list price. If you are selling or buying today, here are a few differences between “the crash” and today’s buyer’s market:

1. Fewer Desperate Sellers

The buyer’s market that defined a 3½ year period from 2006 through mid-2009 was fueled by sellers who were desperate to sell. Many were at risk of defaulting, or had already defaulted on their payments. Today’s sellers are not in a desperate situation. In fact, Arizona has one of the lowest delinquency rates in the nation. Many sellers have been patiently waiting while maintaining their mortgage until prices reach an acceptable level. They are not desperate enough to take a low-ball offer.

2. Fewer Lender-Owned and Short Sale Properties Listed for Sale

By 2009, 70% of sales were foreclosures or short sales. The excessive competition from these deeply discounted properties forced traditional sellers to accept low-ball offers in order to sell to the few buyers that were buying at the time. Today however, distressed listings only account for 12% of sales and their numbers are declining rapidly, placing very little pressure on non-distressed sellers to discount their home.

3. Better Job Market

In 2008 the unemployment rate had started to increase and by 2010 Arizona reached the peak of unemployment at over 10%. As of April, Maricopa County’s unemployment rate is a mere 5.2%, similar to where it stood in 2003. Since jobs allow sellers to maintain their payments and buyers to qualify for loans, declining unemployment is a positive trend that stabilizes both supply and demand.

These are just a few reasons why the buyer’s market of today is not similar to the crash of 2008. The index reached its historical low in November 2007 at an abysmal 26.5, today it is 85.9 which is similar to the second half of 2010. Typical price behavior at this sustained measurement is stabilization or slight decline, not a significant downfall as happened in 2008 (after an unusually long and extreme buyer’s market). Buyers can reasonably expect today’s sellers to be open to paying for closing costs, necessary repairs and a little price negotiation. However, their desperation level will not support the low-ball offer strategy of the past.

*GOD Speed*



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