Good article in the Palm Beach Post about what happens when sellers who don’t want to lower their asking prices collide with buyers who don’t want to raise their offers. The first sentence says it all:
Who’s going to blink first?
But you don’t have to read the Palm Beach Post for this information. The clash is going on right here on our own Hot Property blog. Check out the nearly 300 comments going back to the fall of 2005 on Dean Foust’s blog item about whether Florida real estate is a bubble.
Some people are mystified that housing prices haven’t fallen more considering the steep falloff in residential construction. But that puts the logic backwards. When sellers get stubborn, a few of them are able to get reasonably high prices, so the average selling price doesn’t fall much. But the volume of transactions plummets and the inventory of unsold homes shoots up. The people who take it on the chin are builders, who are forced to cut back on construction because they don’t want to add more properties to an oversupplied market. I wrote about this last week in the magazine.
Is it time for sellers to accept reality and slash prices?
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.