- The massive problem of "Effective Negative Equity"
- The C'ville Area just saw a y/y price drop of 5.8%--larger than the avg. in the US
- In other areas, price declines have slowed
- In the Charlottesville Area, price declines have accelerated
- Area sales are bumping along at a 13 year low, and foreclosures are rising
- US home prices are declining even when distressed sales are excluded
- Banks have started to dump a huge amount of foreclosures on the market, lowering prices
- About 30% of the Cville Area Population is Transient, and the Short-Term Buyer Has Now Disappeared From This Market
- Virginia is #8 of 50 States For Homes W/Neg Eq
- Sales have crashed from bubble highs in the City of Charlottesville and Peak Prices Have Declined Dramatically
Thursday, November 10, 2011
3 Realtors and A Bubble Blog - Part 2 - Should A Seller Try To Wait Out the Market?
This is Part II of a Series. See Part I - Three Realtors and A Bubble Blog - Who, What, Why
Jim Duncan put up a post recapping a WSJ / Smart Money article, which wondered if sellers should be "patient" and stick to their prices.
The take away: Sellers shouldn't wait. What a home "may be worth" is irrelevant when buyers can be patient and the market is still declining.
But read on, because the data is here to back up that assertion, and the Brokers weigh in with their experiences.
The Duncan post contained a video (embedded below) which points out that a new listing gets the most attention during its first 30 days and asserts if it doesn't sell within 30-60 days, it's priced too high.
As an enticement for sellers not to wait, the post includes details about a home Jim Duncan got sold in 21 days.
And it gives data for houses that recently went to contract: (click for larger image/new window)
Michael Guthrie, CEO, Roy Wheeler Realty:
I totally agree with Jim 's post and Mr. Knutsen’s tweet is proof of that. Anyone who has paid attention to what I have been saying since becoming President of CAAR in 2009, and now on my weekly radio show, has heard this consistent message, “Homes need to be in good condition, staged well, and priced competitively until our listing inventory shrinks causing a more balance market” When they are, statistics show there are buyers ready to buy them.
Greg Slater, Associate Broker, BHG - REIII
I absolutely agree with both Jim and the piece by WSJ. In the market under $500k or so, homes priced right AND well maintained can sell in 30-60 days. There is demand. The condition of the home is vital. I would say a home in poor condition with deferred maintenance is going to cost the owner more than it would to do the work itself. There are fewer buyers willing to consider these homes.
This does not necessarily apply the higher you go in price. The higher is end is more saturated and less price sensitive. A home can be priced fairly and take much longer to sell.
The seller Jim described was motivated and prepared. I was able to sell a property in the $700k range in Glenmore earlier this year. The seller and I collaborated on price and preparation of home. It went under contract in 29 days. The key advice I give sellers is that you have to start at a price that is supportable by data. Once you have that supportable range determined, you have to position yourself against the other homes for sale in a context of absorption rate.
This market can be very unforgiving to those who try and test it.
Just in the couple weeks since Jim put up his post, more data has rolled in showing local and national RE declines and problems. The global economy is in chaos via Greece and Italy et al, leading some to fear another global financial crisis is in the offing. So why anybody who really wants to sell would be trying to "wait" is truly mystifying. Somebody who needs to make X amount on a sale--and thus isn't cutting price after 60 DOM--should probably be looking into other options, such as a short sale.
That's enough data for somebody who really wants to sell to be motivated to sell. And for somebody who really wants to buy to make an appropriate offer.