Are Austin Real Estate Buyers Too Picky?
One of my favorite pastimes while driving in Austin is listening to Bloomberg News on my XM Radio. More specifically, I enjoy hearing interviews and discussions with people who explain and justify the positions they take on a wide range of (mostly) business topics. This includes small business, the economy, politics, real estate, etc., but also more specific micro topics such as the current and future outlook for farm tractor sales. And, thankfully, Bloomberg Radio is free of the bluster, yelling and arguing heard on the other XM Radio news stations. These are, for the most part, reasoned subject matter experts giving their honest take on things.
Call me nerdy, wonky, or whatever, but I really dig listening to this sort of stuff. When not listening to it, I’m reading about it. I believe it helps me better understand my own life and business. And it helps fulfill one of my ongoing goals, which is to never stop learning.
Recently, a dating expert was being interviewed about the business of match making sites and the state of modern “mate seeking”. She also discussed the mistakes she sees made by most aspiring romantics. Turns out there are a lot of frustrated romantics unable to find what they want in a mate. This despite the fact that finding and “connecting” with good, quality candidate dates has never been easier. I was struck by how similar her points were to the typical “match seeking” efforts of real estate buyers looking for the “perfect” home.
The quote that stuck with me most was related to how many daters reject someone who actually possesses more than 85% of what the seeker says she “must have” in a mate. To that point, she said. “Do you know how hard it is to get to 85%? If you find someone who meets 85% of your most important criteria, you should be running, not walking, to the alter with that person”. That’s what she said. Run, don’t walk to the alter.
Daters, apparently, allow too many small, picky “deal breaker” distractions into the evaluation process. “I don’t want to date a guy with thin hair” or “I can’t see myself with a guy who would wear a checkered shirt”. But if the guy loves horses, wants kids, and appreciates and “gets” her sarcastic irreverent humor, he’s going to make the great husband she says she wants because he meets the most important set of criteria. Even if he’s only average looking and a little too short.
Dating is more complicated than house hunting because the three (and only three) most important criteria a mate seeker should be evaluating will differ from person to person. House hunters, on the other hand, have had the same three static criteria forever – Location, Price and Condition (which includes age/size). It’s really not complicated at all. But modern buyers have made it so, by allowing too much information and data into the equation.
So, why do so many Austin buyers reject homes that are priced right, in the desired location, and of acceptable condition/size? Are Austin real estate buyers too picky? Yes. And many are just as frustrated as the single 34-year-old gals that dating expert was talking about.
In my opinion, many Austin buyers are too picky. I see this from both the listing side and the buyer rep side. Saying this may seem self-serving Realtor gibberish, but it’s not. I really want buyers to feel good about the homes they buy. And feeling good about the home you buy is about having realistic expectations, not finding the “perfect” home that meets your unrealistic expectations. And, yes, there is in fact a very thin line between being appropriately patient and careful, and being picky, overly critical and unrealistic.
As the dating woman on the radio put it, and I’m paraphrasing, “too many women hold out unrealistic hope for a self-constructed ‘Mr. Right’, who doesn’t exist, while letting too many ‘Mr Good Enoughs’ get away”.
Many of the “Mr. Good Enough” types being those who posses 85% or more of the most important factors desired. The guy who really does love horses, wants kids and will roll on the floor laughing at the same irreverent humor you love. Or whatever your “big three” criteria happen to be.
Same with houses. Let’s look at the three criteria I think should still be the sole determiners of fit.
In Austin, this should be based on cultural, commuter or school track considerations.
I believe most people are happiest living less than a 20 or 30 minute drive from work. This is supported by research that I’ve read and/or heard also. I know it’s true for me, and for most of the buyers we work with. So the commuter component is important and helps narrow down geographic areas within which you will search.
But for some, those under 35 without kids for example, or empty-nest baby boomers, it may be more important to live near where you play. To be closest to your social life and the cultural and lifestyle aspects you want. The Central Austin culture is a huge draw for the “Cultural Creatives” who drive the things that make up the “Austin vibe”. For this mainly “Central Austin” lifestyle, many are willing to pay more and live in a smaller space than preferred. In other words, location trumps price and condition.
For parents with kids, seeking a specific school, this becomes easier because your boundaries are actually defined for you. If you want a home that attends Mills Elementary, then that narrows it down to a specific set of homes in SW Austin. But we might ask you why another equally good elementary is eliminated and help you broaden your search if you can’t find what you want.
For me and Sylvia, we live walking distance to Westlake High School, which was a “must have” for us. We sacrificed on the size and condition of our home because the location, and the walkability to and from school for our kids, trumped everything else. In our case, the side benefit is being back in Central Austin again, which we enjoy greatly and take advantage of regularly.
The important thing about “Location”, is to really understand how the location adds value to your life in ways that bring measurable and quantifiable happiness. For example, a husband buyer might say “by living 15 minutes from home, I can come home for lunches several times a week and see my wife and baby instead of leaving each morning before 7AM and getting home after 6:30PM like I did in California”. This gets to a meaningful core value of family and togetherness.
For one of my 20-something single tenants, living in a downtown Austin condo, she told me, “other than driving to work, I never need my car for anything. I can walk to everything I want to do after work and on weekends, including grocery shopping”. This satisfies her core value of wanting to immerse herself in the cultural offerings of Austin and live an urban lifestyle. This brings happiness.
Let’s face it, if you live in Round Rock, Leander, Cedar Park, or even one of the closer-in suburbs of Austin proper, you are somewhat living in “Anywhere USA” as you drive past Lowes, B&N, PetSmart, Starbucks, Target, and the other countless chain stores that dot the landscape of all US Metro Areas. But you’re living out there because you had a budget of $250K and you wanted a newer home of at least 2,000 sqft, and good schools.
You didn’t want to spend $250 per square foot on an older Central Austin home that attends crappy schools. In Round Rock, SW Austin, Leander, etc., you get a nicer, newer home for less money ($100-$135 per sqft). If you’re a stay at home mom, there is probably a thriving neighborhood Mommy Group and morning buggy brigade. So you have a lot of the social aspects that fit into your stage of life. The schools are good and the commute is acceptable for Dad.
You’ve found that perfect balance, even if you really wanted something more “Austinie” . You can drive into Austin occasionally to get your “Austin vibe” fix, if that’s important to you. For many people, it’s not though.
Condition is a broad term for “the home itself”, and includes age, size, floorplan, finish-outs, yard size, etc. This is where I see the greatest degree of emotional pickiness in buyers. This is the category in which we most often see “perfect” become the enemy of “good enough”. In other words, a perfectly good home, of the right size, location and price range, will be rejected over attributes that ought not be allowed to be deal breakers.
“I don’t like red brick” is one I’ve heard. This is like the dater who rejects a guy because he’s wearing a checkered shirt in his profile photo. Get over it! “The home seems a bit dark”. Curable. “I don’t want popcorn ceilings“. Curable. “I don’t like the brown floor tile”. Curable for an additional $1.25 per sqft when you replace the flooring.
Aside from things which I term “misfit attributes” (functional obsolescence or chronic problems/issues), there is essentially nothing cosmetic about a house that can’t be cured with money OR an open mind.
Yet, in which category do most of the deal breaker issues I observe fall into? Subjective, cosmetic conditions that are curable and which would represent a source of genuine happiness for only the most shallow of people.
That is to say, how shallow do you have to be to allow red brick to define your ability to be a truly happy human being? A house, perfect in every other way other than red brick, ought not be rejected for that reason alone. This is not to discount or dismiss the value of architectural and color appeal that can enhance the beauty and enjoyment of homes, but I doubt anyone’s therapist has ever prescribed “paint that red brick sage green and we’ll be able to get you off the Zoloft”.
The Austin market is going to really tighten up. It’s already happened, and I don’t see any turning back. We have a good, 5 to 7 year up-cycle ahead of us, with increased demand and restricted supply. Meanwhile, buyers seem to be getting pickier and more demanding. Something’s going to have to give, and it ain’t gonna be the market.
As a buyer, sit down and take personal inventory of what’s really important to you in life, and how the balance of price, location and condition of a home can support and add to the things you value most in life. This will help you stay focused on what you want instead of distracted by what you think you don’t want. In turn, this will open up more possibilities, giving you greater choice and freedom in your Austin home search.