A buyers’ market should be just that – a buyers market.  It’s not a fence-sitting, waiting loitering, delaying, dawdling, postponing, vacillating, hesitating, wavering, faltering, pausing, foot-shuffling market.  It’s a buyers’ market.  By its very name it means buyers should be doing one thing and one thing only – buying.  So where are the buyers and why aren’t they buying?

The great irony of a buyers’ market is that even though the opportunity to buy is high, buyer urgency tends to hit an all-time low.  The media becomes the excited purveyor of negative news and uninformed advice, and buyers buy it all.  Actually, it feels like the only thing they’re buying.  Their reluctance is ironic since not so long ago buyers were incredibly excited about buying – and it was a sellers’ market.  Prices were escalating and it was perhaps one of the most difficult times to buy value and yet people were buying like there was no tomorrow.  Buyers were afriad of losing out by not buying even though the advantage was all to the seller.  Now a shift has occurred and it’s a true buyers’ market and what happens?  Fear is still in the driver’s seat but the tables are turned – the fear of paying too much seems to stop most in their tracks and immobilizes them.

When they should have been afraid of paying too much they weren’t and now that they shouldn’t be afraid of paying too much they are.   It’s one of the great paradoxical moments of any market and the herd instinct at its most pure.  Reluctance in the face of great opportunity becomes an agonizingly defining characteristic of a shift.

THE MYTH THAT FUELS RELUCTANCE

In a shift buyers can easily lose site of the primary reasons driving their home purchase – a different neighborhood, a better school district, proximity to work or recreation, a different floor plan, more space – and become hyperfocused on price and price alone.  With so many homes for sale, too many potential buyers buy into the biggest myth of a market shift – they think that they can time the market.   Believing in this myth results in a false sense that the buyer has all the time in the world.  This fixation on finding “the greatest deal ever” clouds their thinking and causes many to miss out on the great deals that are possible.

There are two types of buyers in regards to timing.  There are those who believe that they can time the market and there are those who believe timing will find them.  The ones who believe in timing believe that they can come in and out of the market and always time it to make the best possible buying and selling decisions.  The ones who think the opposite believe that if you just always stay in the market then timing will simply find you.  History supports the latter – it says that if you’re always in the market actively paying attention, although you may never sell at the highest peak or buy at the absolute bottom, you can buy right and always do well over time.   Logic says that you can’t predictably time the market to be able to buy at the absolute bottom and sell at the absolute top.

Timers are waiters – those who wait for prices to come down.  If the market has dropped then prices are down.  Waiters will wonder if they are as low as they’ll go.  The problem is that no one can know this until prices are already headed back up.  So, then the real question a waiter should be asking is “if prices have already significantly dropped is it safe to buy now?”  

A buyer cannot perfectly time a market – no one can.  They can look at indicators that will point out the direction in which a market is going and they can absolutely mark how far it has fallen or risen, but after that the only way to know a market has bottomed or topped out is after it has.  In other words perfect timing is luck.  The smartest people know this and the smartest money never goes looking for it.  They play in the safe zone.

People who buy in a buyers’ market are the smart ones.  They’re buying in the safe zone and living in the area of certainty.  They’re not unrealistic and they’re not greedy.  They know they can’t predict the end of a bust, but they can see when a market has fallen considerably.  They can’t see the end of the speed at which it will climb afterwards so they focus on what they can count on.  

People who attempt to predict the bottom in a buyers’ market are essentially undecided while wondering, “Have we hit bottom yet?”  The real buyers in a buyers market aren’t trying to predict the floor but are just trying to buy smart.  They aren’t looking for a killing because they know that’s a matter of luck not planning.  They know they could just as easily miss it as hit it.  They’re looking for a sound decision with a predictable result and therefore ask the question:  “Has the market dropped enough now to make a sensible purchase?”  More often than not, when they’re asking this question they are already in the safe zone and the answer is yes.  These are the real buyers in a buyers’ market.  

EXCEPTED FROM "SHIFT" BY GARY KELLER (p. 167 - 173)