When my girlfriend sent me out to buy peanut butter last week, she had no idea that such a simple task would end in disaster.
To put this grim statement in context, it’s important to understand that I’m still used to Irish supermarkets (in which you can choose between two brands of peanut of butter and dare not ask for more) and regard all American Mega-Marts with unease and mistrust. As such, you’ll understand when I say that my trip to our local King Soopers became a task fraught with anxiety. Reaching the peanut butter aisle, I was astounded to discover that it was exactly that: a whole aisle devoted to nothing but different brands of peanut butter. I shuffled to and fro along the shelves, wondering whether chunky would taste better than creamy, or if reduced fat meant the same thing as 30% FEWER CALORIES!!! Even worse, was I supposed to buy any old run-of-the-mill butter, or would it be better to buy an all-natural brand? And what was the difference between all-natural and organic anyways? Surely peanut butter couldn’t be organic but not all-natural? All of this was very confusing; perhaps there were better options at the Safeway down the street?
In the end, I came home with a bag of leeks and a jar of marshmallow fluff, a purchase that was, as my girlfriend pointed out, not quite the same thing as peanut butter.
I mention this anecdote because it reminds me of a similar trend that any real estate expert is familiar with (and most likely dreads): buyer reluctance. Simply put, buyer reluctance is a buyer’s hesitant unwillingness to purchase a home. In the same way that my indecision prevented me from buying a jar of peanut butter, a reluctant buyer allows anxiety to stall the purchase of a home, sometimes indefinitely.
To a certain extent, it’s easy to understand where reluctant buyers are coming from. Some people are still wary in the wake of the recent recession, and they are afraid of making the wrong decision. While this mentality is understandable, it’s also important to remember the current strength of the housing market and some of its recently encouraging conditions. Going into the year, experts expected several trends to emerge, such as calmer housing prices and an increased inventory, that normally make buying easier and more attractive. Moving forward, rent prices have continued to soar while mortgages remain low (last week, Freddie Mac estimated that the average 30 year FRM was at about 3.47%), which also makes buying a wise option. The market may not be perfect (no market is), but some pretty favorable buying conditions are out there, so it’s befuddling when homebuyers are still reluctant to move forward with a purchase.
To understand this idea a little better, it helps to consult some expert advice. In his book Shift, Gary Keller spends ample time considering buyer reluctance. Often, he says, buyer reluctance comes from an instinct to wait things out, to see if market conditions will get any better before making a decision. The problem with this mentality, Keller says, is that “the only way [buyers will] ever know the market has bottomed is after it has started back up and the only way they’ll know the market has peaked is after it has started back down. A buyer cannot perfectly time a market— no one can.” In short, waiting around for the perfect market isn’t going to get you anywhere, because you won’t recognize the perfect market until it’s already gone.
The cure, in Keller’s mind, is advice from tried and true real estate experts. “From health issues to diagnosing our car’s engine woes,” Keller says, “we invariably put the most weight on the information and opinion of a trained professional who specializes in a specific area… So why not real estate as well?” The best cure for buyer reluctance, in other words, is a calm, friendly, and relaxed conversation with your local real estate agent.
This service is exactly what Pickett Street provides. Sitting down with a Pickett Street buyer’s agent will dispel any of the scary myths you’ve heard about the housing market, leaving you free to have an honest discussion about your needs as a buyer and the best strategy for meeting those needs. A Pickett Street agent might point out, for instance, that mortgage rates remain ridiculously low and that low mortgage rates play an important factor in the cost of a home. “What is not widely understood,” Keller says, “is the impact interest rates can have on the real monthly costs of homeownership. Even a 10 percent drop in home prices is immediately nullified by a mere 1 percentage point increase in interest rates on a 30-year mortgage loan.” In that case, if you’re a reluctant buyer, it’s worth considering that buying a home now before interest rates rise (as they are expected to) is a wise investment.
It’s worth making one last point before I leave you to your weekend: Keller says that “I’ve learned that in life it’s much better to be able to say ‘I’m glad I did’ rather than ‘I wish I had,’” and I can certainly attest to the wisdom of this statement: I’d much prefer to be looking forward to enjoying a PB&J sandwich during my lunch hour, rather than grimly considering what to eat in my currently peanut butter-less house.
Call us today to set up a time to chat with our Lead Buyers Agent, Katie Silver: 425-502-5397 or info@pickettstreet.com
One of our most recent buyers, Jered, closed on his home September 29, 2016. Here’s a short video about why he decided to buy now versus wait: