Not the market you wish it to be
From Realty Times:
"Losing" on Real Estate Price a Matter of Perspective
by M. Anthony Carr
When it comes to pricing your house when you’re ready to sell it, keep in mind you must sell in the market you’re in today. It doesn’t matter what your former neighbor got six months ago, or what properties are listed for now. All that matters is this -- whatever the last sale price in your neighborhood of your model -- that’s probably your sale price now.
When you’re looking at what you’ll gain on the sale of your house, let’s keep it in perspective. If house prices increased year after year at 4 percent per year and then suddenly people were selling their houses for 1 percent less than last year’s asking price, would that be reasonable? If so, then when property is moving up at 20 percent per year for several years and then suddenly you have to sell it for 5 percent less than the prices last year, would that be reasonable? The challenge is when we move from percentages to dollar amounts. If 5 percent represented $5,000, most people wouldn’t blink. It’s when 5 percent represents $25,000 that sellers start to freak.
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However, there are stories from the field on how sellers are defending their prices as if their lives depended on it. While sellers are sitting on hundreds of thousands of dollars of equity, they can’t stand the idea of dropping their price by $25,000 or $50,000 to sell it today. The house that was $260,000 in 1999, is now selling for $569,000 today. But some sellers now want that same type appreciation and can’t imagine selling it for less than $589,000. Bringing it down the $20,000 or $40,000 to sell the property seems, well, just not fair.
What’s even scarier are the agents who are defending their prices in a correcting market. I have to keep in mind that nearly half the agents in the country (as well as here in the Capital region) were not in business five years ago. They’ve just now entered a market where prices have to be corrected, dropped -- improved, as it were.
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Keep in mind, the market is the market. When it’s time to buy, buy. When it’s time to move, then sell. Work with the market you’re in, not in the market you wish it would be.
10 Comments:
Another standoff article.
More and more of them being published to try to make sellers feel better.
Probably take another couple of months and a few articles in the magazines that lay around in Dr. and Dentists offices.
Pat
It is a very slow process. I still have people around me putting their homes up for at least about $150k more than last year! Last year house listed $550k, this year $720k!
Richard, indeed -- trust no one.
Too much money on the table, people kill for less (literally).
Only a very few clueless people are increasing their price from last year (only one property in the zip codes I watch).
The party is over, and sellers can only hope to find a Greater Fool who doesn't follow the market closely, to jump in and buy their over-priced dwelling.
In March, I observed a few properties that sold in a week, and it turns out they recently closed at very close to asking. These buyers were either oblivious that the market had changed, or were manipulated by realtors. Even by last March, there was no reason to buy a $900K house the first week on the market. Today it's obvious to all objective observers, that it doesn't even make sense to buy this year at all.
A house right next door to that $900K house came on the market a few weeks after it went under contract. It's still sitting, after dropping the price a few times and six open houses.
True, life enters the picture when it comes to timing.
But buying now at $900K, in 5-8 years you'll probably break even upon selling, versus buying 508 years ago and seeing $500K profit.
For most, those are life-changing quantities of money.
Heh, "508 years ago" = "5-8 years ago."
I'm afraid I'm one of those encountering a life changing event - 2nd baby on the way. Unfortunately, just have a 3 br/1.5 ba house that we've already outgrown.
What's discouraging is the volume of homes that have been just sitting on the market at the same price for 3+ mos in some locations (Montville/Whippany/some in E.Hanover).
However, other locations, like my hometown (Rockaway) seem to have already corrected 10%-15%.
I am not in new constuction house. I have a wonderful lot with lots of privacy. My house is a three bed/two bath ranch which I updated two years ago. I have lived in this house almost fifteen years. I must say I am trying to sell. I live in Morris county and I would like to relocate. In updating My house I spent 70-80K (It really needed the work). No one wants to see a 1940's kitchen and bath. My price is my cost incurred mortgage, updates etc. I don't have alot of bling. My asking price is way under 500K. I am on an acre and half of lovely wooded property. What now surrounds me are new homes and down the street new luxury homes and townhomes. I am the cheapest house in the area. I like my house but I just want to move out of the area. I don't feel corporate and I don't have a high flying job. My point is the buying public don't want a nice older home on a huge wooded lot. They seem to want walk-in closets, steam showers, double sinks in the bath. I have to say even if you are competitive in your pricing you still will have trouble. One reason my house seems to not want me to sell...because it somehow knows it will be torn down A.S.A.P by some young yuppie couple!!!!!
another fan of this blog
P.S.
All of the young kids around here want to play at our house. These children all live in McMansions with perfect (GAG)yards!!!!!
Anon 2:44: Your house sounds fine and it will sell.
Not even those McMansions are going with their big closets.
We also have a old place, but the kids come from their palaces to jump on the beds with my daughter, and cry when it's time to go home.
I almost cried when one little boy told me that grapes taste bad in the living room and that's why we can't eat them in there. I told him it was time to stomp some grapes on the floor, and we did.
Some things just don't come from Hovnanian.
Thank You for the comments on my house listing in Morris County zip (07950) I really like the humor and I think this web thread is helping people get back to basics. Who wants to spend the best years of their lives being a debt slaave to a 5000 sq.ft. McMansion anyway? I'll try to keep you updated on my homeselling progress. It should be funny one way or the other.
My realtor has no ideaa about this website. Today I asked his right hand man if they have ever checked this site out. His response was DUH!!!! I kid you not they must spend eight hours a day getting spanked by their itchy bitchy clients. I could tell he was surprised...talk about dead wood.
Another thing I realized I am raising my child without central air. When you actually have a nice treed lot with various exposures and nice big windows (cross ventilation) its rarely hot/humid.
When I am older I will probably appreciate the old A.C. Has anybody noticed how dependent some people are on air conditioning?
Last but not least on my daily patrol around the neighborhood the other day I was walking and I came upon a McMansion up for sale. Guess what they were throwing out? All of their Sterling Silver plate tea service set. It may not be all that valuable but the lazy bum is throwing this stuff because all it needs is cleaning. Just another perfect example of our disposable society. I of course took it home polished it up and gave it to someone who actually needed it. I see that alot when I go out walking just senseless waste of money. I also see alot of teens driving expensive cars...WHY??????? Scary!!!!!
Regards,
Another Fan of this BLOGGGGGG
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