A recent report from the California Association of REALTORS (C.A.R.) confirmed that home prices in…
We’ve heard a lot about real estate “buyer fatigue” over the past couple of years. A Google search for that phrase turns up thousands of real estate news stories and articles, most within the past 18 months or so.
But what is buyer fatigue exactly, and why have so many Bay Area buyers experienced this “syndrome” over the past two years? More importantly: What can you, as a future house hunter, do to avoid this unwanted condition?
What Is ‘Buyer Fatigue’ in a Real Estate Context?
There is no standard definition of real estate buyer fatigue. It’s more of a general description, rather than a clinical condition. Even so, people who are experiencing buyer fatigue tend to suffer the same types of “symptoms” — disappointment and frustration among them.
Danielle Hale, the chief economist for Realtor.com, describes it as a kind of emotional letdown:
“The ultimate sign of buyer fatigue is putting a search on pause. I can understand how in today’s tough market some buyers may not be willing to keep searching. There is a real grief that happens if you bid for a house and don’t get it. Mentally a part of you was already committed to the home.”
So it’s a sense of frustration, disappointment and loss, all rolled into one.
An Offshoot of the COVID Pandemic
The COVID pandemic contributed to the home-buying fatigue we’ve heard so much about, but in an indirect way.
In early 2020, when the pandemic was establishing a foothold in America, most real estate markets across the country already had very low inventory levels. You’ve heard it before — plenty of buyers, not enough homes. The COVID outbreak actually worsened these tight supply conditions.
As the pandemic ramped up, it created a surge in home-buying activity that is now well-documented. According to a January 2021 report from the Federal Reserve:
“During the COVID-19 pandemic, the housing market has tightened considerably. Figure 1 shows that the months’ supply of homes for sale has fallen to historically low levels … The tighter housing market could reflect increased demand (higher inflow of buyers to the market), reduced supply (lower inflow of sellers to the market), or some combination of the two.”
In other words, the pandemic made an already competitive housing market even more competitive. And this set the stage for the so-called buyer fatigue that’s now a household term.
How to Avoid Bay Area Buyer Fatigue
Buyer fatigue (a.k.a., burnout, weariness and frustration) occurs when a home shopper has a hard time finding and purchasing a suitable house. It’s when a buyer puts in one offer after another, only to have the property slip through their fingers each time.
So how do you avoid this frustrating scenario when buying in the Bay Area? Here are some strategies for preventing buyer fatigue and (more importantly) making a successful offer on a home.
- Start by researching your local real estate market. Pay particular attention to sale prices in the area where you want to buy. This will help you make a stronger offer based on current market conditions.
- Be as flexible as possible when it comes to the home’s location, size, and features. In a tight real estate market like the San Francisco Bay Area, it’s rare for buyers to get everything on their checklists.
- Get pre-approved for a mortgage loan before you start house hunting, and definitely before you make an offer. Mortgage pre-approval can help you narrow your search to a specific price range, making it more efficient. It can also make sellers more inclined to accept your offer.
- Plan for the house hunting process to take months instead of weeks. If you end up finding a suitable home within a few weeks … great! You’re ahead of the class. But if it does take months (which is sometimes the case in the Bay Area), you’l be mental prepared.
To End on a Positive Note…
As we’ve noted in previous blog posts, the Bay Area real estate market is starting to shift in a way that favors home buyers. In summer of 2022, we’re seeing more inventory come onto the market, along with a higher percentage of seller price reductions.
If things continue to move in this direction, Bay Area home buyers could enjoy more negotiating leverage over the coming months. They might have more properties to choose from as well, which means less competition compared to the “buying frenzy” of 2021.
For these and other reasons, Bay Area buyer fatigue could be less of a problem during the latter part of 2022 and into 2023.