If you talk to enough people in this profession you'll hear about an interesting phenomenom. It doesn't have a name, but for now I'll call it the "Buyer / Seller Disconnect."
What's happening is that often buyers and sellers have a different, and diverging, opinion about what's going on in the market. If you are currently planning a purchase you already know that most buyers live and breath real estate 24 hours a day while they are planning a purchase! Buyers know their neighbourhood of interest very well, and are closely in touch with the ebb and flow of pricing. An energetic buyer probably knows more about the immediate market conditions in a specific area than many Realtors. If a buyer hears that the market is softening they latch onto that information and possibly even over emphasize it in their mind.
Sellers, on the other hand, are often not as informed. I'm not knocking sellers, just suggesting that often a seller relies on their listing realtor to set a selling price for their home and then hopes for the best. While buyers may believe too strongly that the market is flat, or dropping, sellers have a very strong memory of past news articles talking about skyrocketing housing prices.
Can you see the challenge that is emerging? Buyers believe that the market is dropping and that they can offer a low price that sellers would be smart to take. Sellers believe that they should turn down an offer less than full price and can just hold out until someone offers them full value. Keep in mind that I'm generalizing here and this, of course, doesn't apply to every situation.
The net result of this disconnect is that in the last couple of months we are seeing many more parties simply not coming to an agreement on a purchase price and terms. This isn't in the best interest of buyers or sellers!
If I could be so bold as to make a reccommendation I would have a few comments for all parties. Realtors, first of all, need to make sure that they put a lot of effort into coming up with a sharp listing price for a property. They also need to keep in regular contact with their selers about how the market is changing and not be afraid to discuss price drops when necessary. Sellers could benefit greatly from the knowledgeable advice of their Realtor. If I was a seller I would also work hard to gather as much market information about my neighbourhood as I would if i was a buyer. Don't just focus on the news "feels good." Learn everything that a buyer would learn.
Finally, for buyers, yes, the market is becoming more balanced. Inventory is up and properties are often not selling as fast as they were last year. But, the best priced properties are still selling quickly so be ready to act fast. If you are going to put in a low offer, keep in mind that sellers may not see the market the same way that you do. You may need to negotiate a little longer and be a little more persistent to get the deal you want. Don't give up to quickly or you just may miss that special property!
