Game Of Real Estate Chicken Confirmed
Yes. I read about the NYT article on the slowdown in fact I read about it on Drudge and waited with bated breath till midnight when the article came on. I went to bed with a lot on my mind.
The Grunt would like to take this moment to bask in the spotlight of being the first to raise the alarm. After all it was the Grunt who noticed a distinct drop in open house traffic. Despite critics saying that I was acting like “Chicken Little” and that I should shut up, the Grunt stood his ground. I felt justified in my analysis especially when Curbed jumped in with more information from Douglass Elliman confirming the my suspicions. Thanks again Curbed. I do agree with your assessment. Red is not good.
Now let’s get down to brass tacks. What’s next? And how do we deal with the situation? The Grunt is going to state that it is going to get a lot worse for sellers. I don’t care what Dottie and Pam say that things are going to get back to normal. There is no normal, especially with the way things are going on in the real estate world. This includes not only the Asia situation and the Ginnie Mae snafu but it has been reported that executives of some of the largest development companies are cashing out and are maintaining the party line that they are simply diversifying their portfolios. I think it is obvious that these seasoned professionals see that the end is nigh and they do not want to get caught in the upcoming storm.
The current New York Times article on the slow down will give a shot in the arm to buyers who will maintain their wait and see attitude. They are going to want to see how far the market will drop. It is human nature that to see how low it will prices go. Whether we are shopping for bananas or for sweaters, if there is a sale going on, consumers are going to look for the best deal. Eventually they will accept that the market will not go down any further and but it will be quite sometime for that to occur.
How far will prices go down? I have no idea. That is up to the market. But as I stated before this has become a game of chicken between buyers and sellers and now we are waiting to see who is going to blink first. And buyers are more motivated to keep their eyes open.
Sellers are now in deep s**t. The bidding wars of yesteryear are on their way out and the days of wine and roses are gone. It is time to start getting realistic and doing the numbers and figuring what is the most optimal strategy for your property.
This means figuring out how much of a price drop are you willing to undertake even if it means taking a significant chunk out of your profits. If you are hoping for the return of desperate buyers, it’s not going to happen. If you are determined to wait it out, be my guest. As long you can afford the maintenance, mortgage and it is worth your time to hold onto for the next boom, which will be in a couple of years. But get into your mind that the boom is over. The sooner you accept that the better off you will be.
Brokers, it is time to take a discerning look at your exclusives and prioritize. You have to figure out which ones are priced properly and which ones are the dogs. If you feel price reductions are in order that means having a long talk with your sellers. I won’t lie to you. It is going to suck. They are going cry, whine and scream. They may even ask you to take a cut on the commission. My advice is to stand firm. If your sellers are uncooperative, walk away. They are just spinning your wheels. It is not worth showing up every Sunday to an empty open house or having to deflect criticism from aggravated buyers. As for your buyers, expect them to become very stubborn. Either be patient with them or ditch them.
Whether you are buyers or sellers I implore that all of you consult with brokers, appraisers and each other in order to reach an educated decision. DO YOUR DUE DILIGENCE!
The Grunt would like to take this moment to bask in the spotlight of being the first to raise the alarm. After all it was the Grunt who noticed a distinct drop in open house traffic. Despite critics saying that I was acting like “Chicken Little” and that I should shut up, the Grunt stood his ground. I felt justified in my analysis especially when Curbed jumped in with more information from Douglass Elliman confirming the my suspicions. Thanks again Curbed. I do agree with your assessment. Red is not good.
Now let’s get down to brass tacks. What’s next? And how do we deal with the situation? The Grunt is going to state that it is going to get a lot worse for sellers. I don’t care what Dottie and Pam say that things are going to get back to normal. There is no normal, especially with the way things are going on in the real estate world. This includes not only the Asia situation and the Ginnie Mae snafu but it has been reported that executives of some of the largest development companies are cashing out and are maintaining the party line that they are simply diversifying their portfolios. I think it is obvious that these seasoned professionals see that the end is nigh and they do not want to get caught in the upcoming storm.
The current New York Times article on the slow down will give a shot in the arm to buyers who will maintain their wait and see attitude. They are going to want to see how far the market will drop. It is human nature that to see how low it will prices go. Whether we are shopping for bananas or for sweaters, if there is a sale going on, consumers are going to look for the best deal. Eventually they will accept that the market will not go down any further and but it will be quite sometime for that to occur.
How far will prices go down? I have no idea. That is up to the market. But as I stated before this has become a game of chicken between buyers and sellers and now we are waiting to see who is going to blink first. And buyers are more motivated to keep their eyes open.
Sellers are now in deep s**t. The bidding wars of yesteryear are on their way out and the days of wine and roses are gone. It is time to start getting realistic and doing the numbers and figuring what is the most optimal strategy for your property.
This means figuring out how much of a price drop are you willing to undertake even if it means taking a significant chunk out of your profits. If you are hoping for the return of desperate buyers, it’s not going to happen. If you are determined to wait it out, be my guest. As long you can afford the maintenance, mortgage and it is worth your time to hold onto for the next boom, which will be in a couple of years. But get into your mind that the boom is over. The sooner you accept that the better off you will be.
Brokers, it is time to take a discerning look at your exclusives and prioritize. You have to figure out which ones are priced properly and which ones are the dogs. If you feel price reductions are in order that means having a long talk with your sellers. I won’t lie to you. It is going to suck. They are going cry, whine and scream. They may even ask you to take a cut on the commission. My advice is to stand firm. If your sellers are uncooperative, walk away. They are just spinning your wheels. It is not worth showing up every Sunday to an empty open house or having to deflect criticism from aggravated buyers. As for your buyers, expect them to become very stubborn. Either be patient with them or ditch them.
Whether you are buyers or sellers I implore that all of you consult with brokers, appraisers and each other in order to reach an educated decision. DO YOUR DUE DILIGENCE!
posted by Grunt at
10:51 AM
