We have closed the chapter to an intensely competitive year for buying a home. Now that 2013 is behind us, if you ask most home buyers in this area how they are feeling, they will say:
1) We are exhausted. Trying to buy a house with 5-10 offers per property makes us want to give up. Or, 2) We don’t want to even start looking at homes. There is too much competition and we feel that there is no hope.
If you had asked me in this spring, or even in the summer, I would have agreed that it is a daunting time to bid on a house in any of the mid-Peninsula cities (in the sub-$2 million zone) and actually win. The number of disclosure packets requested per property have often been in the double digits and historically, the rule of thumb has been to expect about 40%-50% of the disclosure requests to convert to written offers. But things may be changing, at least a little bit.
We continue to see low inventory as we are still in the prime winter months. While there are still a high number of disclosures requested for each house, buyers are wary of putting the energy into writing an offer because they feel they have no chance of winning. So we are starting to see that this buyer psychology is lowering the competition level by a little bit. In situations where we would previously have expected 5-7 offers, now there may only be 1-3 offers and those who do write an offer are waiting until the last minute to make that decision.
In fact, I helped buyers purchase a home on December 23rd, 2 days before Christmas. It felt like the stakes were high with 8 disclosure packets requested and a packed open house. My clients, who were about to fly out of the country for the holidays, were daunted at the competition level. I encouraged them to still try and not let the fear of too many offers intimidate their efforts. Sure enough, we were 1 of 3 offers and they got the house and this was the best Christmas present they could have hoped for!
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