I just did a preliminary run of the August sales figures, and it looks like August is going to be as lackluster as the past few months. So what's up, given that a lot of agents (including myself) are reporting that they're busier and seeing a pickup? The problem, I think, is that we don't have the houses that buyers want, and are spending considerable time chasing phantom inventory that doesn't actually lead to sales.
I'm working with 4 clients right now who are looking in a range from $400,000 to the low $500's. They're good buyers with reasonable expectations. They're not 'bottom feeding bargain hunters' looking for that elusive foreclosure deal. They're all looking for something slightly different, so not competing for the same house. One is looking for a nice lakefront house on a non-motor lake, another wants a smaller contemporary in a cool private setting, the third is looking for a BIG house with privacy for large family get togethers, and the last is shopping for a mid-sized renovated farmhouse in a rolling farmland setting. None of these buyers have unreasonable expectations and would buy something tomorrow if they found something they like.
But I'm having trouble finding them houses. We go out on trip after trip to look at houses, but nothing screams 'Buy Me!' Most of the houses we see have one or more significant downsides — quirky designs or layouts, unfinished renovations or dated interiors. The common element among these clients is that they don't want to do a lot of work, and for what they're looking for at the price they're willing to pay, they shouldn't have to.
This situation isn't unique to me and my clients. I often get calls from other agents asking me if I know of something for one of their customers. (Because I cover a wide area of the county, and talk regularly with dozens of agents, I'm often aware of properties that aren't multiple listed, or have seen properties that are outside of another agent's geographic comfort zone.) Yesterday, an agent friend with a lakefront customer up to $600,000 called to ask if I knew of any medium-sized lakefront contemporaries in that price range. I didn't. We traded notes about the handful of houses in that range we'd both already shown, and pretty much agreed on their limitations and drawbacks. We both lamented that there were so few good houses in this key segment, and ticked off a list of lakes that have no available houses whatsoever on them.
I've had similar conversations with other agents about other key property categories — particularly renovated farmhouses under $500,000, river properties and privately set contemporaries. Given the frequency and similarity of these calls, and the speed at which good houses in these categories are snapped up when they come to market, there are definitely buyers out there. But there aren't the houses for them to buy.