Yep, that’s what we’re experiencing, a Real Estate Shift.  Here’s Gary Keller’s explanation (he’s the founder of Keller Williams Realty, the 3rd largest real estate company in the North American Continent):

The moment the media declares a ‘real estate shift’, it’s as if the market just got doused in a cold shower.  The result is fearful buyers, pickier buyers, and eventually fewer buyers.  The remaining few claim that if they can’t get a good buy then they’ll just say good-bye for now.  The market has cooled off, (if you haven’t noticed!)  Cautious consumers appear willing to let good deals die and great opportunities pass them by in hopes of getting a steal.  They start missing the forest for the trees.  Wary of paying too much, buyers go too far and begin to offer too little, and only properties that appear to be serious bargains get serious attention.  Sellers who are slow to recognize this shift will quickly become overpriced and consequently be overlooked.

This isn’t rocket science.  When the market shifts, first buyers and then sellers become overly guarded and set in motion another intriguing game of ‘The Price if Right’.  In the version, instead of guessing there is no top (like in 2004-2006), buyers now predict there is no bottom.  When previously they were aggressively pushing prices forward, now they’re equally aggressive in trying to pull them back.  The truth is the market remains full of people who genuinely want to buy and sell.  The question is – at what price?  The answer sorts both sellers and buyers into a range of categories from ‘not interested’ to ‘still motivated’.  This sorting now defines and shapes the marketplace.  The desire to do business hasn’t gone away, but the heat has gone out of the market. 

A shift exposes and magnifies the classic real estate price conflict that has always existed:  the asking price a seller wants versus the price a buyer is willing to pay.  To illustrate this conflict and how the market determines who has the upper hand, I’ll share a story:

At the bar exam 3 different would-be attorneys forget their pens.  One asks a test proctor if he has an extra pen.  He does, but only one.  The 1st attorney says, ‘I’ll give you a dollar for the pen’.  The 2nd attorney chimes in, ‘I’ll give you 2 dollars!’  Then the 3rd says, ‘Hey, I’ll give you $3!’ … By the next time the bar exam is given, all the attorneys know not to forget a pen and all the test proctors have heard they should bring extras.  This time only one attorney forgets and when he asks a proctor for a pen, the proctor answers, ‘Sure.  I’ll sell it to you for 3 dollars.’  Then another proctor jumps in and says, ‘I’ll sell you one for 2 dollars.’  But before the attorney can pull out his billfold, a 3rd proctor offers, ‘I’ll sell you mine for just a dollar’.

In a sellers’ market the power of pricing favors the seller and buyers will compare for a limited supply.  A shift means this power is now in favor of the buyer and that sellers will compete to attract the limited supply of buyers.  Our goal in representing a seller in a shift is to use pricing to empower them as much as possible.  And that’s not easy.

Can you think of anyone who may be considering buying, selling, or investing in real estate?  If so, please let me know … I value referrals and do them nationwide!  Can you think of anyone who’d like to pay off their mortgage in a fraction of the time?  If so, please let me know!

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THANK YOU!
Cynthia Hash, Realtor/SRES/GRI, Keller Williams Realty
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