We are already seeing evidence of this as we have in every market as prices increase on well maintained and improved homes when they are in the same neighborhood as distressed homes with lower price tags. Buyers are reluctant to pay more for a home than "makes sense" based on comparable properties with similar square footage and location. On the other hand, the non-distressed seller who has maintained and upgraded her home, is caught in a difficult situation.
Just as we, in the Real Estate industry, have had to educate sellers to the declining market, we are now educating buyers as they purchase homes that have the upgrades and amenities they desire. There will not be as much flexibility in list to sale price in these homes. Homes are selling at list and over list price. Buyers will, in some cases, need to purchase a property that will not appraise but absolutely meets their needs.
Every buyer seeks out the best home in their price range based on the criteria they have established with their real estate professional. Although Realtors admit there is a wide range of how many homes the average buyer looks at before making a decision, they agree that once their list of wants, needs, and community is narrowed, there are only a few homes that match the list in the price range. If a buyer is willing and able to do the work on a "fixer-upper", a distressed property might be a good choice. If the buyer can wait though the process of a short sale, they might be able to snag a good home for less than market value. However, if they want a move-in ready home, the choice might be limited to a property that is priced at or over "market value"and they may have to adjust their thinking on what a fair price is for the home.
Change is good...challenging and always interesting!
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