Real Estate Round-Up: Champion or Chump, only time will tell

There has been a failure to launch in the Fallbrook housing market. Since the Great Recession of 2006, housing has not rebounded to fully recover from the losses that occurred. Housing serves as a propellant for expansion for the local economy, so when housing stalls, so does the economy. So, what’s the problem?

Interest rates did creep up in 2018 but have recently declined. The Fed said that they do not anticipate any interest rate increases and that possibly, future reductions will occur. This factor alone should stimulate Fallbrook housing sales. It seems to be creating more activity but not more closed sales.

Nationwide, there is a high level of student debt that has impacted millennials getting into the market. Baby boomers are choosing to age in place, which is keeping housing units off the market. Jobs are being created close to high cost metropolitan areas, which is causing those market prices to climb, and is also pushing buyers out of those markets into lower cost areas, further away from the jobs. Environmental and zoning restrictions are choking the development of additional supply. All these factors are having a major impact on housing sales.

There is one additional factor that is not being discussed by the real estate pundits but is heavily discussed within the rank and file, who work every day selling real estate: the buyers. The most aggressive, unrealistic group of buyers I can recall experiencing is the buyer in today’s market who wants to “steal” a property, expects the seller to do all repairs requested and may still bail on the transaction.

We’ve personally experienced a buyer walking when the appraisal came in low, even when the seller and the Realtors agreed to make up the difference for them. In a separate instance, a buyer canceled when they decided that they wanted to be able to see the backyard from the front door, even though they entered escrow on a home that never offered that. Other Realtors have shared similar experiences of buyers canceling over minor issues that in the past would have easily been resolved by compromise or negotiating to find a suitable fix for the problem. Not today. I guess the buyer would rather pay for a second home inspection and appraisal, and continue searching for that perfect home, than find some common ground that allows the transaction to be completed.

We have been in a sellers’ market for the past few years. Perhaps this knee jerk reaction comes from buyers getting back at sellers who in the past held all the cards and called all the shots. I cannot personally recall a time that sellers showed as much disdain for buyers during the process of selling a home. A phrase we use in the profession that encourages negotiation and compromise, is “Sellers want to sell, and buyers want to buy” so let’s help them get there. Today, sellers want to sell, but buyers “kind of” want to buy.

The importance of pricing a home correctly has never been more important. Hiring an experienced Realtor with exceptional negotiation skills is a must. Sellers will need to develop thicker skin, because this market may be here for a while, so buckle in, hold on and brace for a wild ride.

Can this attitude be fixed? Probably not, but hearing it and realizing it is not personal, should help sellers proceed with caution. Sellers should be prepared for a bumpy ride. My personal plea to buyers, “Only enter into a purchase transaction if you are fully committed to the process, which always has and always will have bumps along the way, and then commit to finding resolution, rather than bailing.” A robust housing market helps everyone. Buyers have an opportunity to be a champion or a chump. Only time will tell, which title they choose to embrace.

Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N. Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.