Do Fear And Greed Drive The Market?

By
Real Estate Agent with Coldwell Banker Cascade Real Estate

When you reduce sales to the most basic element the answer has to be yes.... fear that someone else will get the item, or something will happen to make it unattainable and greed that we can make money now, or get the best price, or grab off a bargain.

I think this is especially true today. At least in my market, the forces in play are setting up the perfect scenario for Fear and Greed. Whether it is logical or not, whether data supports continued sales, rates, etc doesn't make a difference... but perception does and perception opens the door to fear and greed.

No one knows what will happen in the future you have about a 33% chance that your predictions will come true (up, down or stay the same) so we look at data. The data, at least in the Wenatchee Real Estate market, shows housing sales around Wenatchee up 20%. The inventory of residential units for sale is down around 2-7% depending on how you quantify it and prices on homes sold are up about 2% over last year same time (with a new month almost in the books I expect these numbers to get even better). So we have fewer homes at a higher price and more sales. At the same time interest rates have more than edged up lately. The public knows all of this or at least most of it. Without yours and my backgrounds we have the perfect set up for Fear and Greed to kick in.

Some would say this is a good thing and make hay while the sun shines as the market will eventually change (remember up, down or stay the same). And to an extent I agree, but if you are really interested in building a business and in serving clients then you also need to take a minute to be sure your client takes a breath and looks objectively at their wants rather than reacting to Fear and Greed. Its our job!

If you have the time check out my other blog on my web site!

Posted by

Perrin Cornell, Broker, ABR

Century 21 Esclusively

135 N. Missin

Wenatchee, WA 98801

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Comments (1)

Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS

Perrin, Spring market can be overwhelming!  Panic, fear and greed do show their faces:)  Keeping that inner calm for your clients will make their home buying experience a good memory.

Jun 06, 2013 08:00 AM

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