Monday, December 15, 2008

Food for Thought - The Buyer / Seller Disconnect

I've been recently following many of Noah Rosendblat's blog entries from his successful Manhattan based real estate blog, Urban Digs. Noah actually started before dabbling in the real estate market and it is amazing to see that someone only four or five years into his real estate career become such a staple in the industry, using his renowned blog as a launching pad.

We can all agree on the fact that there is a consumer confidence issue in the current market, but Noah takes it a step further to provide his theory on the disconnect between buyers and sellers, which is causing the liquidity problem in the market. To put it in laments terms, sellers are having a hard time facing reality and they are still asking for prices that are comparable to when buyer confidence was extremely higher. Unfortunately it is a vicious cycle and both the buyers and sellers are trying to hold out for the bigger and better deal causing a standstill between both parties. During the height of the market I know buyers have been asking themselves when will prices level off or even go down, because I was one of those people nervous about if I would ever be able to afford a home. I was a first time home buyer and I didn't have the luxury of selling a current home to buy a new home. Now that the tides have turned, it is ironic to see that people who were praying for prices to decline are now sitting on the sidelines because they are either trying to time the market or just scared. To streamline the process buyers need to realize the deals that are in front of their face and capitalize on the market being down around 20%, while sellers need to price ahead of the downward curve bridging the gap between the buyer and seller. I recommend reading the following post by Noah Rosendblat.

The Buyer - Seller Disconnect [Urban Digs]

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