My take on the current real estate market is that too many sellers don’t get it and too many buyers get it too well. In other words, not enough participants on either side of the transaction grasp what it takes to achieve a sale under current market conditions. Sellers are in denial about the fact that the market will not support the prices of a couple of years ago and buyers have unrealistic expectations regarding what they should pay. Too few players in the market seem to have a proper regard for value, and fixate instead on an artificially inflated or deflated (depending on which side of the transaction they are) price.

This is not a universal condition. More and more buyers and sellers are beginning to understand the current market dynamic and the pace of home sales is noticeably picking up. The bad news for sellers is that distressed properties—short sales and bank-owned properties—are a significant factor in the market. This serves to hold prices down, because these sellers definitely do “get it.” They understand the need for an aggressive pricing strategy in a market with too much inventory and too few buyers, and are willing to accept what the market will bear in order to achieve a sale. Non-distressed sellers have got to get on board with this strategy or risk being left in the dust.

Buyers, on the other hand, need to recognize that, while the market IS lopsided in their favor, the bottom has not fallen out. There is still a limit beyond which it is unreasonable to expect a seller to go. While it is true that value is an individual thing, and “beauty is in the eye of the beholder,” the individual’s values must be realistic relative to the marketplace or he or she will find the buying process long and frustrating. As the real estate market continues to move toward normalcy, the buyer who doesn’t “get real” will likewise be left behind and will miss out on some historically monumental opportunities.

Several years ago, when the realty market was red hot, it was almost universally accepted that hard market data was necessary in order to negotiate a sale (albeit more so by buyers than sellers, who were then the ones in the driver’s seat). That hasn’t changed. Only the market data has changed. Back then it favored the seller; today it favors the buyer. But if a property is priced correctly for the current market condition, it already represents a significant value relative to prices of two or three years ago. It is unreasonable to expect a seller in most cases to go below an already depressed market.

Buyers and sellers alike need to wake up and smell the coffee! And the REALTOR® community has to help their clients understand the market in which we’re all working. Once that happens, all we have to do is get the lending community on firmer ground and we’ll all be off to the races!