Are Agents Driving Prices Down? My Contrary Indicator

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

I'm getting the sense that agents in general are guided by the herd mentality.  They tend to extrapolate the current trend and market conditions too far into the future.  I guess it's just human nature.  The problem is that agents do have the power to persuade the players in the housing market.

I remember that  a common theme not long after the market leveled off was that those stupid low balling buyers just didn't know anything about the market.  Buyers putting in low offers were scorned and referred to in a negative way.  Prices had leveled off but there was no way they were going to go down.   That just doesn't happen.  Don't you know that you have to bid higher than the last sale in order to have a chance at actually buying it? Those crazy low ballers were going to come up empty and miss all of that appreciation that was right around the corner.

Fast forward a couple years and now putting in offers at 20-30% below asking price is a common and accepted occurrence. Now it's no longer the  "unreasonable buyers" but it's the "unreasonable sellers" that I see many agents writing about.  I'm reading more  and more posts about how some sellers just don't understand how bad the market is.  Don't you know that you have to price it below the last sale in order to have a chance at selling?

I actually think that agents in mass help push prices higher on the way up and then push them lower on the way down.

I hear so many agents whine about the media being negative but when it comes time to talk with a seller about price, all you'll hear them say is how bad the market is and that they need to get ahead of the downward trend in pricing or they will never sell.  You end up with a concerted effort by agents that pushes prices down. 

I'm starting to see agents who on a regular basis list REO homes 30% lower than other comparable homes.  They seem to have convinced the banks that the market is worse than it is.

It might be true that the trend is your friend but it's important to try to recognize when things start to turn.

So I'm going to use ActiveRain posts and comments as my contrary indicator.  When the majority opinion is that sellers are just not being reasonable on their price, then I think it's time to start buying.  I think we're almost there.

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About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

 

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com .

 

His proprietary  "Maitski Line Reports" chart out the absorption rates over the past 14 years in 37 different market areas.  Know when it's a good time to buy or a good time to sell.    

 

His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

 

Over the years, Tim has optimized his business so that he now can offer a huge 50% commission rebate to his buyers.  The more experience one gets, the easier the job becomes.

 

Tim also has a "Five Days to Sold" System that uses an intensive marketing blitz to create a showing frenzy that creates urgency and offers.

 

Tim is always looking to LinkIn with anyone who is interested in building their social network.

 

View Tim Maitski ●Atlanta Realtor●'s profile on LinkedIn

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Rainmaker
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William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Now if people up in these parts could be convinced of this...

What you say sounds reasonable, and is probably dead on. How will prices level off and start to climb again unless we stress to sellers that now is the time to hold the line on prices, and not to persuade them to "follow the market"? How many listings will I have to turn away from because the seller won't list at a price that "the market" accepts as a quick sale?

Jan 26, 2009 02:18 PM #1
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Rainmaker
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Tim Maitski

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