How to Climb a Broken Ladder

The property ladder is broken.

At least it seems that way to many sellers, as the local real estate market is eerily quiet this spring.

Hear me out.

In terms of listings, the 'have-to' sellers are still showing up -- those folks who are selling because of death, divorce, job change, job loss, etc. But the 'want-to' sellers who are reaching UP for the next rung on the property ladder... their kids are getting bigger or their incomes are increasing, and in any normal-ish market, this would be the time they decided to move up to a bigger, more upgraded home - or even their dream home.

They would be reaching for more space, a pool, maybe better schools. They'd have enough equity in their homes to throw at the new purchase and get the monthly payment down to a manageable figure.

These folks are the cream of the buyer crop. They're experienced homebuyers who know what they want, typically have good credit, and are sitting on a wad of cash.

But what's happening in the market right now is that those gold-star sellers/buyers are disqualifying themselves from making that move this year.

They're simply not showing up. They don’t want to try to climb a ladder that appears to be broken.

So what's happening? Simple -- they're on home search sites like Zillow looking at the price of the 'upgrade' house and getting sticker shock. And then they shut their computers and move on.

A few of them will call me and ask about the market, but most of them don't.

The 'silent majority' is sitting at home right now, deciding that "We can't do this," and, at best, are saying "We're going to wait and see what happens next year."

To paraphrase Tony Robbins, "People make decisions emotionally and justify them with logic," and this idea rules here. Let's admit that some folks have it in their head that this market feels scary and uncertain and we wouldn’t be able to pry them into action even if we used a crowbar.

If you’ve read this far you’re probably thinking this might mean less competition in the marketplace. The challenge is that without these move up buyers, the entry level buyers and the buyers on the rung below don’t get a chance to jump into the market. We’re hearing this every day, especially from entry level buyers, that there’s still very little for them to look at and what little comes on the market is still getting swamped.

Part of the solution is to ignore the screaming headlines and clickbait stories that play up the extreme part of the market. It doesn’t matter what or where the market is, there will always be outliers and extremes that can be used as examples.

The other part of the solution resides with the professionals in the real estate and mortgage business doing a better job of educating and providing viable solutions to counteract the scariness and the emotions in the current market. We as industry professionals need to step up with creative and thoughtful solutions to help our clients get through this market.

The Guelph and area real estate market has over the past 50 years averaged 3-5% growth on an annual basis. There have been times of massive run ups in values (2022) and times with dramatic price drops (1992). However, the long term graph is a nice steady slope up.

Sitting on the sidelines and listening to the hyperbole is not going to get you into the market or get you into that next home. Ask yourself: is the ladder really too broken to climb, or have you just been waiting to take a real shot at climbing it?

Talk to the experts, get the details and numbers you need to make a logical and beneficial decision.

Reach out, let's get a proper conversation started.

Have a great weekend!

Paul Fitzpatrick

Appointment Calendar: https://calendly.com/homegrouprealty

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