I suppose we all pick and choose. We pick the data that supports our positions, whether the decisions involve personal choices or business decisions. We pick the favorable bits, discard the rest, and apply what we like to our situation. Religion follows this path as well, and many pick and choose the parts of a doctrine that fit their particular version of a particular belief system. In real estate, buyers pick the data they like, and sellers pick from another pile. In the middle of these two positions lies the truth, but many times a side subscribes to a belief, whether it’s backed by data or not, and they hold solid.
Sellers in this market are making mistakes. They are missing opportunities. They have been fed the words of an increasing market, and they have latched on to a promise. The promise is that the days are now good, but better days are sure to follow. They are walking from deals they should be taking now, because of something that might be waiting for them in the future. Their behavior is foolish.
If someone walked into your office this morning and offered you a $20 bill, this would be nice of them. If, perhaps 8 years ago, another person had walked into your office and offered you $22 dollars, that was nice of them to do so at that time. You spent all of the years in between looking for that person to come back to bring you $22. The day they brought you those dollars, you feasted like a king at lunch. You ordered the soup AND the salad, and you ordered a lemonade because it was summer and you were thirsty, but also because you had those $22. You were pleased with your $22, but no one had walked up to you with a handful of dollars since.
But this day, you have a new benevolent visitor in front of you, and they have a $20 bill. They are offering it to you. Their hand holds the crisp bill, their arm outstretched to you. But you waive it off. You say that once someone offered you $22, and if they don’t offer you $22, or perhaps $23 because of inflation being what it is, then you have no interest in their offering. The visitor is confused, and insists, but you are staunch and principled and you decline. The visitor leaves, with their $20. You sit back, content to wait for the next $22 offering.
This is an absurd example, but this is how absurd sellers are behaving in this market. They are making market mistakes. They are missing opportunities. They are taking solid, market rates and turning them away because they believe, based on some news story they read in some newspaper once, the markets are better. In fact, they might even get better next month, too. The demographics, they say. The stock market, they insist. The rising tide is at work lifting all ships, they remind. But they’re wrong. And they’re losing deals left and right because of a stubbornness that will prove to be their undoing. Certain properties are hot, and they will sell because the market supports their sale but aged inventory is no longer in a position to refuse offers because of a few percentage points worth of argument.
Some would suggest that a bird in the hand is worth two in the bush. I’m not sure I agree. I’d so much rather have two birds, because if I’m super hungry and all I have is one bird, and I have guests coming over for dinner and I know that there is a certain time of the afternoon when I’ll see two birds in that bush, then I’d wait until that time. But a bird in the hand is always worth 1.05 birds in the bush. Sellers have lost their perspective, and as a result, there’s a good chance they’re going to spend much of this year regretting the decisions they made when the year was still young.