During the first few decades of my career as a real estate attorney, the question posed by clients was, "What will buying (or selling) cost me?" When bad things hit the fan, an era of "How low will the seller go?" was launched, followed by a backlash period of, "Which buyer will go higher?"
Today's real estate inquiry, "Is it worth it?" comes from both sellers and buyers. They wonder whether the time, costs, stress, and uncertainty of a present-day real estate transaction are more about pain and less about gain.
You may be shaking your head in disagreement, certain that recent stats show the real estate market lurching forward. I know what some indicators illustrate, but I'm talking to people who will perhaps count when the 2014 market is measured.
Home buyers are idling while asking good questions (it beats the days when purchasers were swept up and into contract by true passion or real estate agent agitation). Questions range from personal insecurities such as, "Do I want to take on decades of debt in my 20s (30s, 40s, 50s, 60s)?" to more general fears. Buyers are wondering, "Do you think the seller's asking too much?" or "Do you think I'd be over-paying?" One potential purchaser asked, "Is the market in [Anytown] stable now? I don't want to make a huge mistake."
Home sellers looking to move up, down, or sideways are also inert. As they need a place to go after they sell, they face the same insecurities as first-time buyers, with some extra dollops of doubt mixed in. Homeowners who have seen negative equity vaporize would count themselves lucky to break-even if they sold, so where will the cash come from to put towards another house? And do they want to take on another 15-30 year loan after surviving a six-seven year immersion in the cold underwater world of mortgages? If the homeowners have too many misgivings about re-upping, they'll opt to rent instead. However, renting is not as easy or as inexpensive as it may have been for them years (decades) back. As discussed, they'll likely walk away from the closing table without enough cash to pay the security and upfront rent, and then there's the pesky credit scores that prudent landlords check.
Younger buyers with stable employment express concern about lack of raises they believe may make it difficult to afford ever-increasing real estate taxes; mature sellers-who-want-to-buy-again voice nervousness about a job market that may toss them out at any time. They'll hear media reports about improvements in real estate activity and price (and see their neighbors' moving vans), but then they question the fearlessness of today's real estate participants, and want to know about the resources these plucky people possess.
All real estate news isn't dismal; the residential market isn't completely mired in indecisiveness. However, the upward figures lauding activity don't mention all the wannabes poised on the threshold, too afraid to ring the bell.