Fear, Uncertainty May Be Slowing Home Sales

Share |
(Sacramento, CA)
Thursday, October 18, 2007

It’s been a frustrating six months for home seller Jesse Szeto.   

"I’ve had visits, I’ve had showings and I’ve had compliments on my place but still no offer." 

His home has been on the market since April. It’s a three bedroom, two-bath townhouse at Q and 10th Streets in Downtown Sacramento, just two-blocks from the State Capitol. Szeto says the place is primed to sell.   

"I’ve tried very much to listen to the advice of my real estate agent and change the stove, added an over-the-range microwave, changed the kitchen faucet, repainted the kitchen..."

But still nothing. Szeto’s original selling price in April was $349,500. In June he dropped that figure by $5,000. 

"The comments that I receive from folks is not so much that the price is too high but it’s just that it’s not quite exactly what the buyer’s looking for."  

Picky buyers – real estate analysts say a flood of resale homes on the market and lowered interest rates make this a buyer’s market. But sales keep slowing down.

Only 700 homes closed escrow in September compared to 900 homes the previous month, according to the latest figures from the Sacramento Association of Realtors.

So if it’s a buyer’s market, why aren’t people buying?  

"There’s fear."

Clay Sigg is a Senior Vice President with Lyon Real Estate. He says there’s a psychological block. 

"I think buyers don’t have enough information. Whenever somebody is contemplating purchasing and they don’t have enough information and they fear that they may be making the wrong decision then they may hesitate and that’s what’s happening right now." 

And Alan Wagner with the Sacramento Association of Relators says there’s another reason buyers are sitting on the fence – they’re waiting for the market to bottom out. But who knows when that’s going to happen. 

"The problem with the bottom of the market is, they the buyer will not know it until six months after it’s been there and by then the prices are going to start going up. So they’re thinking they can shop the bottom, however we don’t know where that’s at." 

Jesse Szeto says he may eventually take his townhouse off the market and rent it out. In the meantime, he’s still hopeful he can sell it….if a buyer makes a bid.

"I’m willing to negotiate but I can’t negotiate when there’s no one even giving me an offer."