Despite the many incentives aimed at today’s buyers, prospective home owners are still leery of entering the market. The first-time buyer tax credit and the lowered mortgage rates may have warmed things up, but these benefits haven’t removed all hesitation – not yet, anyway.
So what factors are holding buyers back?
Fear: Buyers worry home prices will drop further, meaning depreciated value as soon as they buy. Along with that, they fear mortgage rates will continue to get better and further incentives will be rolled out – it’s a matter of waiting to see if a better deal is out there.
Publicity: The hype surrounding today’s real estate market makes it a frightening prospect for buyers, whether veteran or new. It’s not hard to find a newspaper or magazine article decreeing the surplus of for-sale properties and lack of ready purchasers. When things seem uncertain, buyers follow suit.
Logistics: Even in addition to fear or talk of a bad market, current home owners looking to move have an added problem – they may need to sell their existing homes first, and if that’s taking longer than expected, the buyers may question the decision to move.
Understanding the causes of buyer hesitation can help sellers through discouraging periods of a home sale. It’s also a great reminder that sellers need to price competitively and aggressively, more now than ever.