Following up on the previous post, I was thinking: I’d guess that buyers (and I) consider the houses currently for sale to be, on average, 20% overpriced. Sellers probably think their own house is just 5% off the true value, and that 15% difference is keeping buyers and sellers apart. You wouldn’t think that such a relatively small spread would prevent sales from happening, but it is, especially because the sellers respond with venom when presented with a “low” offer.
So I am showing distressed sales almost exclusively these days. They take months to consummate because of the convoluted structure of our banking system, but at least the sellers – banks – realize that the game is up. The ordinary Greenwich homeowner does not, and is still insisting on cashing the paper profits he thought he’d accumulated in the past decades.