In any real estate market - there are real buyers and real sellers.  I have seen tire-kickers and unrealistic sellers over my life on this planet.  They likely were here before my arrival and undoubtedly will exist far  beyond my departure.  Advice?  Nah, hey they know more than me, right?  Or is it I?  🙃

In our area, we have hit a point that advice is really hard to give.  The offers I have written lately are so high even the listing agents are shocked, then they accept an even higher one.  Is it a bubble?  So many people have so much equity, I do not think so, but I have no crystal ball.

Who told them it leads to a bubble? I think that is the state of the economy. Prices wouldn't go up if people didn't want to buy the place.

Some just don't believe you about the prices - nothing you can do but let them go off on their own. I try to feel those types out beforehand.

If you are indecisive & can't pull the trigger you are going to lose. 

They'd be rolling the dice no matter what they decide. I personally wouldn't worry about it if I'm buying a personal property for the long term.

Lay out the facts (including market facts & the fact that you're not in possession of a crystal ball), relatable stories (for both sides of the equation), encourage third party resources and of course, the final decision is on them.

That is not something I am experiencing, John. 

I don't give advice to every buyer...and I do not work with low ballers.

The key is to work with buyers that have the money and the right mindset.

If a buyer thinks the market is going down the drain, that is OK with me...I move on.

Eve

With so little inventory, it seems that most new clients are looking for something that isn't on the market yet.  Like something that they looked at 2-3 years ago and didn't pull the trigger--and now wish they had.  It's tough for a buyer.  

I'm busy enough helping people who 'want' to purchase.  I don't have enough time on my hands to try to convince people who 'don't' want to purchase that they should.

John,

We do not give advice like that.  There are plenty of opinions on the subject both full of optimism and full of pessimism.  Everyone has to pick their side and do what feels right to them.  In our real estate careers, we were fortunate to have smart clients who made their own decisions.  A

I haven't heard this from clients. But if I did, I'd pull a Cher in Moonstruck. Slap. Snap outta it!

Haha, not really, but that's what I'd want to do. I'd just explain reality. 

"Do you want this home or not?"

my crystal ball doesn't show me the future market.  Do I think we're going to have a recession.... you bet your bippy I do, do I know when it will start?  nope.  But I really wish more rentals were available in my market right now because I'd sell and rent.

Whatever the market, buyers just need to offer what they can afford. It either works or it doesn't. Bidding wars have no effect on what they can afford to pay for a home.

Michael Jacobs saved me writing a long answer!

I tell them there's no bubble and it's all about supply and demand... the last time we had a bubble we had plenty of supply. We are seeing bidding wars here, but I'm not seeing houses selling at crazy amounts over ask in any event.

  The game will be over by the time you decide to play.  Buy the house you want NOW TODAY.

You can't have a bubble with ZERO inventory. It's as simple as THAT!! 

not the kind of thing I give advice about

Either participate in the current market or stay in the current home.

It could be argued that the unreasonably low interest rates is creating a false real estate economy. That is the only irregularity is see today. I do not see Bank of American creating FAKE money.
However, the great number of houses purchased without financing also attract multiple bidders, so this may be more about the fundamentals of supply and demand. That means if one is unwilling to compete, they will miss out on all things in life.
Those who opt for the mug-womp position are demonstrating they lack clairity regarding their greater purpose. 
As an agent I can remind them of their 5, 6 and 7 and suggest fence sitting does not get them closer to their purpose.
At that time the agent may want to reconsider THEIR purpose and discern if their current activity is getting them closer.
Finally, create the mechanism for this buyer to buy without competition. Actually go through the steps with them observing how THEY calculate value for a property that will present no competition. If it make sense, have them FUND this real estate inititive and learn something new. When a solution is presented and they still mug-womp, you know all that you need to know. 
Here in my slice of paradise   four out of 10 mortgaged homes in Pinellas County FL were worth at least 50 percent more than what the owners owed on their loans.

The challenge I think this presents to active agents is how to craft a message to equity rich homeonwers that will get their attention and compel an action. 

When lenders/banks played the game, it was true bubble-making at its best. Today, I see more of a true Real Estate cycle with normal supply and demand plus welcoming rates inviting safe participation. Its a good time to buy or sell. What it leaves out are the investors who flocked to Wall Street

They might be right but they might be wrong. Different strokes for different folks. I present all offers.

I think you have to go back and look at their motivation. I personally don't have time for people who just want to lowball. I did just have a lowball offer on a listing. It seems the guy is lowballing others in the area. All I can say is Next. All we can do is watch, listen and learn about the state of the economy. Interest rates are so low right now that it will help make up for some of the higher pricing. If people ask about if I think it will go up or down, I tell them what I'm hearing. Having gone through the recession, my advice is make sure you can stay in the house until the next spike/bubble/wave, etc. If you can't, can you rent it? My own son recently bought a house. He is young but bought one that should he need to move, he can rent it. If he gets married and has a family it is big enough to live in but not too big. If I need to come stay with him, there's a room for me. Haha! Just kidding. These are discussions you can have but you can't make the decision for others whether it is family or clients. 

I tell them that we have heard of a bubble, from the public, coming in our local market for over 20 years. If those peple had bought then, their homes could be paid for and they would now have $100-200,000 minimum in equity. 

Our market place has never fallen. It switches from buyers' market to sellers' market and sometimes even a balanced market. It levelled out in 2013-2015. Homes stayed on the market longer and sellers were willing to negotiate a bit but the market has never busted. We here in Nova Scotia, like many areas of the Maritimes, are typically conservative with our money. Our home prices have lagged behind most of Canada for decades. We are just starting to play catch up. 

My advice has been to buyers:

- Get in and get in soon before you are priced out of the market.

- If they are not wanting to compete, look at purchasing elesewhere as it is the new reality in our marketplace.

- If you can afford $300K, don't look at homes listed for $300K. They will sell well above asking. Look at something in the $225-250K range. 

- If you don't want to keep, then get out of the market and save more money. When things level out again, give me a call but you will be paying a great deal more for a home. The average sale price in our area increased over $100K in 12 months.