Roger Theriault
MBA, REALTOR®
(561) 827-0899
I’ve had this discussion with almost every potential seller this year so far… what it takes to get a sale, versus simply being “on the market”.
The South Florida Sun-Sentinel puts it in easy to understand terms in their article today, “Selling your home means being realistic in a down market“.
The New York Times today has an interesting and thought provoking article, A Real Estate Deal Seen From 2 Sides, which has fictitious letters, one from a buyer to a seller, and the response from the seller.
Part of the seller’s response:
That said, your offer disappointed me. You seem to believe that I’m not aware of how bad things are out there or that I’m in denial. But I do read the headlines, and I priced the house accordingly. I knew I might have to wait awhile to sell it.
The Times writer invites readers to send in their own versions.
I’ve never dealt with letters but I’ve certainly had both buyer and seller ask me to pass on statements that express their position or reasoning. It would be helpful for both buyers and sellers to consider what the other is thinking. It may be easy to assume a buyer or seller is unrealistic (certainly there are more than a few out there…) but I’ve seen buyers try to negotiate down an already terrific price, and I’ve seen sellers obstinately failing to recognize that buyers don’t feel their home is worth as much for valid reasons.
Just thinking about having that shoe on the other foot, may save time and stress.
The New York Times took the pulse of a number of real estate markets across the country, and chose to headline their story “In Housing, the Strong Turn Weak“.
While Wall Street is growing hopeful that the economy may dodge a recession, many economists warn that the pain in the housing market may last for several years.
Even markets that once seemed immune to the slump, like Seattle, are weakening. Prices nationwide might fall as much as 10 percent more before a recovery takes hold, economists said.
While there are a number of somewhat positive signs, there are an equal number of negative signs in the various markets. Some of the areas that have held up well have just recently seen declines in sales, while some of the hard hit areas are now seeing improved sales.
It appears that once prices approach a certain level in an area, the buyers return. And we are fortunate that here in Palm Beach County, sales have been picking up. Hopefully that is a sign of a turnaround in our local market.
We’re getting better local housing news!
The number of homes sold in Palm Beach County in April 2008 was 662, up significantly from the sales in February and March and even with the figures from the same month in 2007.
Buyers rejoice! In 2007, Fannie Mae had designated Palm Beach County a “declining market” and since late last year was adding an extra 5% to most down payment requirements in our market area.
The Wall Street Journal publish an opinion article The Housing Crisis Is Over [5/6/08] earlier in the week, which said in part…
The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.
and continues…
MarketWatch published an article last week that reveals the danger of statistics…
“If there are a lot more homes sold on the low end and fewer on the high end, the median price is bound to drop dramatically,” NAR Chief Economist Lawrence Yun said. “In normal times, a median price would reflect typical homeowner equity changes, but these are not normal times. The jumbo (mortgage) market is frozen and the buying activity is more concentrated in lower-value homes.”
Statisticians already know statistics can mislead, but it’s easy for journalists and analysts and agents, buyers, and sellers to miss it.
More disappointing numbers… for some.
The Florida Association of Realtors® has reported that in March 2008, just 572 single family homes were reported sold by local Realtor® boards in Palm Beach County, down 21% from March 2007, with a median price of $320,200, down 15% from a year ago.
On the positive side, the number of homes sold in March jumped from the 401 homes sold the previous month. And we’ve seen more buyers on the streets looking at homes.
This median price drop may reflect the fact that many of the sales are of lower priced homes, as they become more affordable to buyers who had previously been priced out of the market. Statewide, the news was a bit better, with improvements from the previous month.
In what might turn out to be a domino falling move, some lenders have been freezing or reducing access to existing home equity lines. Reports from The New York Times, the San Francisco Chronicle, The Boston Globe, and ABC News indicate many big banks are “quietly” yanking or halting equity lines.
Sadly, while the loan amount may have been based on a full-blown appraisal, the new valuations are mostly done on the computer. And as a result, without local knowledge, they can be too low or too high - and therefore unfair to the homeowner. The sudden freeze can interrupt plans already in the works, such as weddings and home improvements.
What lessons have we learned in 2006 and 2007 about marketing a home for sale?
One very important one is that in a declining market, just like shooting ducks in an arcade, we have to lead the target.