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Understanding A Buyers Market - How it Affects You
By Ryan Ward | March 5, 2008
Alpharetta real estate is the area within Metro Atlanta that I watch most closely as it is the city in which I reside. The real estate market in general has obviously made it more difficult for sellers to move their homes as quickly and for as much money as one or two years ago. Inventory levels rose through all of 2007 offering buyers greater choices and presenting sellers with more properties competing with them directly. Their is an important distinction that needs to be made however, because it is evident to me that buyers have the wrong impression about how a market with more inventory affects them and just how much additional leverage they have due to higher inventory levels.
I chose Alpharetta because it illustrates very well my point, which contrary to the media reports, does not mean that a buyer looking to move to Alpharetta has all that many more choices than they did one year ago. This is a point that I have continued to try and drive home, but, still falls on deaf ears for many. I suppose that as much as I would like, there are really not nearly as many people reading this blog as there are watching the quasi so called news reports in mainstream print and television media outlets.
Appropriate analysis of information is not often provided without looking to direct sources and it may be just to difficult for the mainstream folks to deal with. So, back to my point about 1 buyer looking for 1 house in an area like Alpharetta. Let’s take a real world example of a buyer and get down to the truth about what is really happening and how this market truly affects their buying process - good or bad. It’s really both because they generally have incorrect preconceived notions about the market. Here’s the example:
Let’s say you are a buyer and you want to live in Alpharetta for all the same reasons everyone does and you can afford to spend between $375,000 and $450,000. You have 2 children, need 4 bedrooms and a commute of no more than 45 minutes to and from work as your basic requirements for your home. Oh yeah, I forgot to say that you don’t want stucco and you want at least 1/2 an acre - remember, we are dealing with a real client here, not the whole real estate market on a piece of paper. Also, you aren’t interested in anything built before the year 2000.
Now that you havew eliminated over 99% of all homes on the market, don’t you think that the “buyers” market is not so relevant?
Let’s take a look at some real numbers…
O.K….are you ready….???
YOU HAVE SIX HOMES TO CHOOSE FROM!
Really. That’s it.
So how many more houses do you think you have to choose from than when it was a “sellers” market?
1, maybe none. This is why it is important to understand the market and not just listen to the mainstream news media.
Have a question about this post? Curious about another area? Please post below and I’ll be happy to help.
Topics: Alpharetta Real Estate |
March 6th, 2008 at 5:45 pm
That is a great illustration of the difference between the national market and the buyer’s actual local market.
March 6th, 2008 at 11:20 pm
Thanks Jim,
It is and it’s something that I think is important to convey to buyers so that they don’t start the process off with the wrong expectations…I’d rather lose someone because I told them the truth and they didn’t like it rather than skirt the issue and deal with it at some tipping point later on and have to address a problem that should not exist to begin with because of properly setting expectations.
March 29th, 2008 at 9:21 pm
[…] Ryan Ward released a breaking post on Understanding A Buyers Market - How it Affects You. See below for a quick excerpt: […]
April 20th, 2008 at 11:18 am
Great post Ryan. I plan to post something along these same lines. In Sarasota county we have around 8,000 listings which is a lot for us. When you fine tune a search, eliminate the wrong locations, neighborhoods and overpriced homes the selection is not as great as everyone thinks.
The media sets the expectation that someone can come to Florida and pay 60 cents on the dollar. Last month our sale to list price was 92%.