Wonder why the real estate market is in some crazy pseudo-gridlock? I’ve read many explanations of the current post-bubble-pre-collapsing housing market, but none of them hit it on the mark like the one I’m about to share with you.
Actually, according to Diane Swonk, chief economist for Chicago-based Mesirow Financial, “we are currently experiencing the worst of the market freeze, which is being exacerbated by the gap between the buyer’s desire for bargains and the seller’s fantasy of what they once thought their homes would be worth.”
It’s perfect in its simplicity. Yes, every buyer I know keeps waiting for prices to just fall already. Yes, every seller I know just refuses to sell their home because it “should” go for more from what they’ve seen in the market recently. This conflict in philosophies between buyers and sellers has put us in a state, not unlike Los Angeles traffic, of gridlock.
Take a look at the Washington Post article I found the quote in. It presents a clear picture of the state of today’s market.
I guess the question now is, who is going to win out in 2007?