Where Are The Buyers?
The Homebuyer Tax Credit is over and with it – so it seems went the buyers. As you know, purchase contracts had to be ratified by April 30th, 2010. I just wanna talk real quick about the run up to April 30th, then the time just following April 30th – and then today. Also, I really want to get all of your feelings on what’s happening in your town.
In Maryland we got crushed in February with two huge and historic snow storms – VERY uncommon for Maryland. Following the blizzards we had record cold, so no melt and NO buyers trying to get out there in all that crap to look at houses. They turned out to be the perfect storms. The pent-up demand coupled with the looming end of the tax credit actually created a buying frenzy, the likes of which we have not seen since the mid-2000′s. We sold 5 houses in less than a week or two on market – and we had multiple offers above list. Thank you Lord, and thank you US Gov for giving us the incredible artificial market.
Following the April 30th deadline things slowed considerably, but after a couple weeks it appeared buyers came to their senses. They figured they missed the deadline, but still could take advantage of historically low rates. At just over 7% unemployment, we’ve not been affected too much by the downturn in the 
economy in my town, but I think we’re every bit affected as anywhere else in the country by a tremendous lack of consumer confidence. That said, the phones were ringing for showings and following the end of the credit, we got a couple deals under contract in May.
Fast forward to the last 14 days. Much like the entire east coast, we’re under the jackboot of the “dog days of summer.” Its HOT! Real HOT! And folks, I’m here to tell ya; you can do some sweating in Baltimore when its 98 degrees coupled with 90% humidity. Talk about some “Schweddy Balls.” The result: The phones are dead! I mean, its like the calls just stopped as of about 6 days ago.
What’s going on in your town? I want to hear from you, especially if you’re on the east coast, or if you’re trying to sell houses right now. Chime in.
Popularity: 5% [?]
Lots of showings. Offers are coming in at a snails pace. We seem to be back in the 08' market where there are alot of tire kickers and more dreamers than ever. So it goes…….
Nate in Appleton, WI
I don't have any rehabs on the market, so I have no valuable input to provide on that topic, I just wanted to comment about how cute that picture is of the dog on the raft.
P.S.
I just reserved my hotel room for the retreat- you better be there, pal.
Hi Craig-
Here in good 'ol Milwaukee buyers are super picky because they know they can be. Tons of supply. We have to fully stage the houses and they better be under-priced relative to everything else in the neighborhood and a top-notch rehab. Agents are getting frustrated as they're having to show buyers 25+ houses before they're making a decision…so that first impression when they're looking at your house is super important. Same with Nate…offers coming in at a snails pace and they're only coming in near asking on the mint rehabs.
Hope all is well on your end and look forward to seeing you in Kansas City!
Brian
I'm with ya, Nate. I'm just one guy looking at my tiny little slice of the universe – but from where I sit, the calls have slowed considerably. Thanks for commenting, Nate Dawg!
@Steph: Always timely and always pithy – that's the Steph style I've come to know and love. Great talking with you BTW. And, yes. I've already committed to J.P. to bunk with him for the VIPS trip. He and I will be doing our reenactment of the scene from, “Planes Trains and Automobiles,” where Steve Martin and John Candy have to share a queen size bed.
Guess who will be playing who?
@Brian: Thanks for commenting Bri. Look forward to seeing you on the Vips trip. I will agree that the formula you suggest above almost seems mandatory. For us its: great neighborhood + amazingly rehabbed house + staged + priced at comps or below = sale in 45 days or hopefully less.
What – no comments on the Scheddy Ball reference? Could be one of the top 10 SNL skits of all time!
Lots of showings (13 in 60 days) so I know marketing is not a problem but no offers!! Well, I actually had an offer but financing fell through. There is a definite slow down here in Georgia BUT there are buyers out there. Rehab is full rehab (http://www.wealth-steps.com/home-flipping.html) and fully staged. However, I do see an increase in bank owned homes on the market once the tax credit went away. Which means I am competing against a lot of foreclosures. I cannot beat them in price so I have to beat them in quality and “move in readiness”.
I have had a simialr experience to you out here in Portland Oregon. We have 5 rehabs on the market and fortunately 4 of them are pending at the moment….but I had to work pretty hard to get the mid level priced ones to go pending…lots of showings but no offes. Also the feed back seemed to be extremely tedious (i.e. I could hear a car drive by, the pool wasnt clean enough, the grass is a slightly different color around the clean out). I just attribute this to lack of consumer confidence like you mentioned in your post. The only way I have been able to overcome this is reducing price, which sucks, but at the end of the day we are still moving properties quickly just for less profit on this round of deals. I am just going to make sure any buys I make moving forward are at an acquisition price of 5-8% lower than I would have paid pre-tax credit so that I can preserve my profit margins. check out my facebook group if anyone wants to see our product:
http://www.facebook.com/#!/group.php?gid=113419…
@Luis. Thanks again for commenting Luis. I took a look at your link above. The place look real nice. Good luck with the sale. As I always say – make your house the VERY best on the market in terms of its competition.
@Tucker. Thanks for the comment Tucker. Sounds like your doing some pretty good volume out there in Oregon. If you come across any luxury deals $1Mil plus that you want to wholesale or partner on, let me know.
It does suck to lower the price, but it sucks even more to have a house sit on the market. In my market, you can smell the vultures after 30 days. The longer the house sits, the more vultures.
Yea there are vultures in my market as well….but my favortie are the the FHA buyers vultures who are fresh out of a Robert Allen seminar. We have been quietly pushing pretty good volume out here for the past year and a half, but as you know the name of the game is volume, some are singles, some are doubles and every now and again you hit a dinger. So at the end of the day if your turning the money over there is money to be made. I'll let you know if we run across an big dollar stuff that's worth a look. I have been eyeing a few that have hit the auction block over the last few months….which seems to be the best way to acquire them out here.
Craig, I will be in your area next week and I would love to be able to shake your hand and if possible take a look at one of your projects. Please email me to see if we can work something out. Thanks.