The question is best answered with an example. A hypothetical buyer looks at 24 homes in a strong buyers market.* The market includes eight months of inventory, meaning three of the 24 homes will sell this month. Of the 24 homes, six are of good quality and condition, six are poor quality, and 12 have potential. Two of the six good ones and one of the 12 potentials are priced very competitively and are the three that will sell.

 

Our buyer recognizes the three as the best available opportunities and decides to offer on one. The other buyers looking in our market also choose these three homes to focus and offer on. The three properties attract multiple offers, and the others are ignored. As a result, the three sell at or above their list (asking) price.

 

This is a fairly typical scenario. Buyers of any product or service seek quality and value. In the following month, some new homes will come on the market and some will reduce their prices. The three perceived by the market as the best quality and value will sell. There are exceptions to the rule and some buyers will occasionally choose to offer on one of the other properties and buy at a discount. So although we can sometimes buy homes that we don't want at a discount, we usually have to make a strong offer and pay a good price for the ones we want.  Even within a buyers market, it's a sellers market for some homes.

 

 

 

 

*It is generally agreed that a balanced real estate market includes about four to six months of inventory of homes for sale. A smaller inventory would be considered a sellers market and a larger inventory would be a buyers market.

 

 

 

Pat Paulson,

May 8, 2010

  

 

Increasing Supply Will Slow Market Rebound
04/26/2010
share
Discussion about real estate markets usually tends to focus on prices. And the Twin Cities market has had encouraging price news this year. After three and one half years of declining prices, we've now had three consecutive months of increases in… more
Did I Say Recovery?
02/14/2010
share
So the Twin Cities real estate market has finally posted a year over year price increase for the first time in 41 months this January. Certainly good news but let’s not break out the champagne yet. The recovery/rebound…whatever you… more
They Finally Cut the Grass
07/27/2009
share
A local non profit used the City of Minneapolis ‘First Look' program to purchase one of my foreclosure listings in June. They literally snatched it away from a couple that had made a full price offer on this home in a nice South Minneapolis… more
A Tale of Two Markets
04/28/2009
share
As we know, the Supply Demand Ratio (SDR), is perhaps the most important leading indicator for predicting future price movement in real estate markets. Sometimes, significant other factors such as foreclosures moving through the market or lack… more
TIME; NOT TIMING
06/20/2008
share
Question: When is the best time to buy? Answer: When you are ready. I was watching a Celtics/Lakers game when a commercial came on for a financial services firm. I was barely paying attention, but then I saw the phrase: "Time; Not Timing"… more
I Wish I Would Have Bought Back Then
04/29/2008
share
I had the chance to purchase a house for $25, 000 in 1976. My friend decided to sell it to his sister instead. Three years later it was worth $50, 000. I finally bought a couple of years after, but found myself wishing I had bought a bunch of property… more
What Comes Down Must Go Up
04/24/2008
share
The first stage of the rebound is well underway in the Twin Cities real estate market. How it plays out remains to be seen but history and current trends give us good clues. Markets are cyclical and excesses, whether up or down, sew seeds bearing… more
Zillow is Stupid
02/07/2008
share
I was just plugging in addresses for fun to see what Zillow's Zestimate is. According to the Great Zillow, one property that just sold for $70, 000 is worth $176, 000. Another one listed at $159, 000 is worth $246, 000, and another one that was… more
The Case Against Case (Shiller)
02/07/2008
share
The Standard & Poor's/Case Shiller Index was released Tuesday, January 29 th showing an 8. 4% drop in real estate prices in November, 2007 from November 2006. Case Shiller is a highly reported index that is alleged to be more accurate than… more
 
Pat_hi_resolution-11

Pat Paulson, Realtor Minneapolis, Minnesota

Minneapolis, MN

More about me…

Exit Realty Metro

Cell Phone: (612) 386-8902

Email Me



Links

Archives

RSS 2.0 Feed for this blog