We discussed this issue at a team meeting recently and I think that it’s a very interesting perspective.  The discussion centered around a visitor to one of our open houses.

Frustration and Disappointment

A visitor to the home that Sunday bemoaned the fact that, although the offering presented him with everything he wanted, he couldn’t move forward with purchasing it.  He needed to sell his home first, and doing so has become a struggle.  It has languished on the market for months, and he has yet to receive an offer.

Oxymoronic

During the meeting, the host of the open house described that it was as if a light went on.  The open house visitor, she thought, who is obviously disappointed and frustrated, represents the segment of the buyer population that contributes to the log jam of inventory that currently exists in some marketplaces.  A number of buyers who can’t buy because their home hasn’t sold.  The current supply of inventory in Lower Fairfield County, Ct. is approximately eleven months.

Market Value

Realtors understand that the market value of a home is defined as “the price that a ready and able buyer is willing to pay.”  Consequently the existing inventory of homes that fail to sell, do so primarily because the asking price is too high.  Ironically, the visitor to the open house should be disappointed and frustrated with himself more than anyone else.

There is of course a hierarchical affect at play here.  Perhaps unknowingly, home buyers who can’t buy because their home hasn’t sold are nevertheless contributing to the challenges before us.  They are in essence assisting in creating an environment where home prices remain flat by impeding themselves and others from purchasing a more expensive home.

What about this scenario sounds familiar with a current situation that you may find yourself in?

What strategies are you employing to help solve your client’s dilemma?

Please let us know in the comment section below.

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