While most of what I read about the Year of the Tiger is filled with references to uncertainty, I have come to a different conclusion, especially as it relates to the real estate market.

The image that I continue to be struck by is that of a tiger ready to pounce. It is crouched and waiting for the precise moment to leap. I liken this image to what I see happening with home buyers right now. They are ready for action, but uncertain if this is the exact time to jump in. So they are standing on the sidelines waiting for a sign that NOW is time to buy.

In light of the Olympics’ recent conclusion, another appropriate analogy is that of racers lining up at the starting line waiting for the sound of the starter’s pistol to ring out. Once they hear this shot, buyers will be off and running and there’s no telling who will be the winners and losers. 

An effective pricing strategy right now seems to be to “throw chum in the water” and let the feeding frenzy begin. When buyers see under-priced properties emerge, they quickly write up an offer to be sure they are in the running. They don’t want to be left out while others are snapping up great deals.

However, many people are wary of this strategy since most economists believe this is the behavior that brought us to the painful situation we currently find ourselves in. Most buyers want to avoid “irrational exuberance” but don’t want to miss out on a deal. So they are stuck in a posture of waiting and watching like a crouching tiger.

This is evidenced by the dichotomy of some homes sitting on the market for months at a time, while others experience multiple offers within a few days of hitting the market.

The log jam seems to be showing signs of breaking as savvy buyers are snapping up valuable properties for what may prove to be pennies (or quarters?) on the dollar. Sellers are battle-weary and, after months on the market, have finally come to realize that they can no longer expect to get what their neighbor got a year or two ago. So they are more realistic, and if they are in a position where they “have to” or just “really want to” sell, they are willing to consider offers that once would have made them shudder in their boots.

Buyers have to recognize that we are going through an adjustment period now and that this too shall pass.

What I am finding in my current deals is that in order for buyers to come to terms with sellers, they must be prepared to be fair in their offers and not expect that every seller is a “distressed owner” that is prepared to accept a fire-sale price. Many homeowners in the Bay Area are still doing alright and will simply choose to postpone the sale until the market returns. No one really knows when that is, but we’re all pretty sure it will be within the next few years.

In the meantime, this Tiger is working to maintain its relevance to my clients. I am renewing my commitment to the basics of this business which has been (and always will be) that of “being of service” and providing the best experience possible for those that I work with. There are opportunities out there and it is my job to stay focused on creating new beginnings for those within in my circle. There has never been, in my 11 years of doing this, a more exciting and challenging time to hone my skills and help navigate these confusing market forces.

Image courtesy of law_kevin