The Paradox of Choice and The Current Housing Market

Too many choices leads to consumer paralysis and we are seeing the effects of this in our housing market. The glut of homes on the market and continued foreclosures slows the consumers ability to choose because they can spend days, weeks, even months sifting through all the options and every day the pool of inventory rises drowning out the buyer's ability--and desire--to make a move.  Just like the Aesop Fable of the dog and the bone, a buyer will drop the house they wanted yesterday in favor of the new foreclosure on the market--over and over again.  The First Time Homebuyer grants can help and the threat of raised interest rates may eventually pull buyers off the fence but as real estate professionals we must help keep clients focused and do our best to prevent them from being overwhelmed by too many extraneous options.  Once a client has 'made a decision to move forward with a home purchase' it may be beneficial to eliminate external influences such as automated delivery of new listings on the market.  Otherwise, they could end up on the losing end as investors snap up properties and interest rates eventually rise.  This study posted in the New York Times suggests that too many options can lead to information overload which can actually be debilitating and cause consumers to make 'bad choices'. Likewise, there has been some noted success by realtors posting listings at 'just below market prices' with a one week bidding deadline to get inventory moving by causing immediate interest, delivering a 'call to action' via the urgency of the deadline, and serving their sellers best by selling a property quickly before any further drop in pricing can occur to their detriment.  These strategies can help to counteract the overwhelming options and thereby defeat The Paradox of Choice.