Buyers suffer from price drop hesitation syndrome in Steamboat
September 19, 2010
Steamboat Springs — Ask a Steamboat Springs Realtor and they are likely to tell you that they are very busy this month, they just aren't writing many contracts.
"A lot of people are looking, they're just not buying," said Loui Antonucci, of Old Town Realty. "I'm busy showing property, but it's hard to get people to write an offer."
Antonucci's not complaining; he was on the selling side of three properties that closed in the past 30 or so days.
Becky Ferguson said the buyers with whom she is working are savvy investors.
"A lot of them want to know what's going to happen in November" when the outcome of congressional and Senate races could provide insight into how national tax policy will evolve in 2011. In other words, the fate of tax cuts could determine how much income buyers have to finance real estate purchases in Routt County.
Ferguson said in today's market, new product is forcing older projects to take a back seat. She has two buyers expressing strong interest in the slopeside condos at Edgemont, which were completed in January. Her clients are content to wait.
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"There's just no urgency," she said. She's optimistic that as the pace of transactions gradually increases, more buyers will follow suit.
Antonucci said he doesn't feel the sense of urgency will return to buyers until equilibrium is returned to the relationship between sales and the growth of listing numbers. With so many homes to choose from, buyers don't have the fear of missing out like they did in summers 2006 and 2007.
Ulrich Salzgeber, of Buyers Resource Real Estate, who also is the outgoing president of the Steamboat Springs Board of Realtors, said what really makes buyers hesitate right now is the sense that if they hold off another few months, or even another few weeks, they could purchase the same property for significantly less money.
"I think the buyers are serious, but there is no motivating factor to make them pull the trigger right now," Salzgeber said. "We're seeing almost weekly price drops depending on how distressed the property is," Salzgeber said.
He exclusively represents buyers and quickly acknowledges that his brokerage's use of communication technology reinforces this hesitation to write a purchase offer.
"A lot of our clients are on automatic listing alerts," Salzgeber said. "When the price of a home is lowered, they get an updated e-mail. They can see what's happening."
One of the dynamics in the current market is the opportunity to purchase a home for less than its replacement price, Salzgeber said. One of the results of that awareness among buyers that they have increased buying power is that they are looking for homes with higher finish levels than they might have two or three years ago. That trend is ratcheting up the competition among sellers.
Antonucci agreed that the clients looking at property in Steamboat in fall are intent on acquiring something for their own use and are not speculators. The trick seems to be getting them off the fence. And even with a contract in hand, there are more hurdles than usual ahead.
"The challenge is that, once you have an offer, you have the additional mayhem of getting a loan, which is a huge hurdle for us to overcome," Salzgeber said. "We used to say, 'We'll worry about getting past the inspection period,' but now we're basically sledding it out until the day of closing."