Housing markets: Picky buyers eyeing bargains
Many of today’s buyers are not only holding out for the best possible deal, but also becoming particular about location, size, and amenities.
When Herson and Liz Enerio recently made an offer on a four-bedroom home in Fairfield, Calif., they decided to bid $1,000 more than the asking price, said Prashant Gopal in BusinessWeek. Considering that more than 80 percent of homes for sale in Fairfield are either in foreclosure or fast headed toward it, you would think that the Enerios would have made a low-ball offer rather than “play it safe” by upping their bid. But it turns out they had just lost out on another house, which was scooped up by a buyer offering $5,000 more. Yes, it seems that some hard-hit housing markets have seen prices fall so far that they’re suddenly “hot” again—relatively speaking. Prices in these markets are still falling. But sales volume may be on the upswing, and multiple offers are more common than you’d imagine.
Home prices may have “finally fallen low enough” to bring out the bargain hunters, but that doesn’t mean the worst is over, said Pat Mertz Esswein in Kiplinger’s Personal Finance. “Foreclosures will continue to rise with the jobless rate and the next wave of subprime-mortgage delinquencies.” As a result, median prices could fall by another 14 percent this year, according to a market analysis by Fiserv. “That, plus the dour economy, will keep many buyers at bay.” Of course, if you’re willing to hold on to a house for at least five years and are “confident in your job prospects,” you might want to start looking. In some respects, “homes haven’t been this affordable since the 1970s.”
The down market certainly allows buyers the chance to be a lot pickier, said Alejandro Lazo in The Washington Post. “Just as speculative mania and a fear of losing out seemed to grip buyers during the housing bubble, the opposite appears to be occurring now amid the bust.” Many of today’s buyers are not only holding out for the best possible deal, but also shooting for the moon when it comes to location, size, and amenities. “Potential buyers think: Why don’t I just wait? Because maybe this house looks like a good deal, but maybe in a couple of months the nicer home down the street will be even cheaper.” In other words, they’re thinking of the house less as an investment and more as a place to live—which, according to experts, isn’t a bad thing at all.