by Melissa Terzis, Wolf Street:
Washington, D.C. Housing Market at a crossroads.
Clients change their minds. But historically, with the low home inventory levels we have had in Washington, D.C., buyers don’t often walk away from a house they successfully place under contract. Typically, buyers see a bunch of houses and zero in on “the one.” They shoot first, and we can ask questions later because someone else may get this house.
Occasionally, someone changes their mind. Maybe after a night of sleep. Maybe after the home inspection when there were a few more things that needed repair than they expected. Maybe after getting the homeowner’s association documents and finding something they don’t like. This is all totally normal, and it’s how most buyers seem to operate. They either get over those little hurdles and buy the house or they rescind the offer.
But in the last several months, I have noticed a lot of indecisiveness in the market – much more than usual. I’ve had several buyer clients change their mind – not just once, but up to a dozen times about buying the same home.
After the first of my many indecisive clients started to waver back and forth nearly a dozen times within a day – all about the same home, I thought it was situational. The home had downsides as every home does, but this one didn’t seem to line up with the client’s wish list so I understood.
She was trying to talk herself into it based on a few big positives but there were definite downsides. I pulled the old trick out of my hat, and asked, “Don’t think about the individual pros and cons. What is this house, to you, on a scale of 1-10?”
When she said it was a 7, I said, “Don’t buy this house, let’s go.” I knew it wasn’t the house for her. No one should make that many compromises in my opinion to only get something that’s a 7 out of 10. She ultimately moved on and found a house she was excited to purchase. It’s almost like those mediocre relationships you talk yourself into believing are right, but then when you finally break up, the next person you meet is fantastic and there’s never a doubt.
This same process then played out with several more buyers, all in the same month, as well as several buyers for one of my listings. They want it. They don’t. They want it. They don’t. They wake their Real Estate Agent at 3 a.m. (not me) canceling their contract. Then bypass their Real Estate agent and email the listing agent (me) at midnight a few nights later, apologizing for walking away but saying they want it now and will pay over the asking price. Then they change their mind again.
I can’t describe some of what we’re seeing now in just a word or two – it’s more than indecisive or commitment phobic.
My explanation for this sudden spastic mind-changing by so many buyers is rooted in one place and it’s not the election. Sure, 95% of DC was stunned by the outcome. But a lot of people have jobs that are not tied to an Administration. This indecisiveness we’re seeing? It’s fear.
Buyers are scared. A few months before the election, the email subjects were screaming “Price Reduced,” “Price Improved” or some variation that indicated there was a listing out there where the seller not only did not enjoy a bidding war, they didn’t get their initial asking price either. The tide was starting to turn a bit even back in late summer and early fall.
Everyone has been so conditioned to this long-time seller’s market that they are actually suspicious now of a reduced price or a house that didn’t sell in the first weekend. It’s as if the fact that no one else wants the house makes a buyer unable to proceed.
Whether it’s the thrill of the chase they miss, or their fear that the house is overpriced, election woes, or just genuine apathy toward the current inventory, things will soon shake out.
And this lull in the market? Combine it with the holidays and dead of winter upon us and the deals are about to get really good.
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