A Good Time to Buy? Or Not.
by Ron Gable - Our VP/Manager in the HMB REVIEW 11/1/07

I always marvel at how the economics of our industry swings as the exterior influences affect the economy. Last year, the media was still talking about multiple offers and crazy things buyers were willing to do just to get sellers to accept their offers. The word overbid became commonplace in our real estate jargon and several slang words for overbidding were part of our normal dialogue.

People would talk about the number of offers on the properties they were selling, or buying. Neighbors would talk about houses down the street. “They got 6 offers…we got 8 offers…it sold for $100,000 over…we were able to get it for only 5% over the asking”.

Now in some markets particularly in parts of San Mateo County, some of those scenarios still exist. We are not seeing it in the degree we did at the height of the frenzy but are seeing some of it nonetheless. Because of the turmoil in the sub-prime market, the market dealing with high ratio loan to values particularly in the lower or starter price ranges has slowed quite a bit. Many of these “sub-prime” loans were made to borrowers who could not verify their income, had less than stellar credit and minimal or no down payment. Although there are still loans available for buyers that have moderate credit and can’t document their income, they do need a small down payment. What surprises me about this is that with some buyers not able to buy, many that are seem to be sitting on the sidelines. What I am sensing is that the feeling is “It’s not a good time to buy”. Because there are fewer buyers in the market, there are more available properties which means that some homeowners would be willing to accept less or offer more favorable terms than they would just a short time ago. And yet with all the negativity in the media, some buyers would rather sit it out. “It’s probably better to wait until the market and the other buyer’s situation improves. It will be more fashionable to buy then and I can feel good about beating