norfolk real estate market.. need guidance on offer

[CGCG]

We just offered $360 for a house that was asking $450. It was a find it-fix it-flip it house that had been purchased for $300K in Nov 2007 with about $30K worth of work done. They came back with $440 and when we tried to counter they said they were unwilling to negotiate further. Not what I expected in this market, but oh well, on to the next property.

Sheldonteam, I'm curious about your comment (seems [SIZE=3]uncharacteristically pessimistic/realistic for a realtor which is great![/SIZE]). I'm told that the market in Virginia Beach-Norfolk-Chesapeake, for example, had double digit gains in 2004, 2005, and 2006, as high as the low 20% range per year in some cases and even 2007 was at least slightly positive. (Office of Federal Housing Enterprise Oversight) If you compound that appreciation, it seems inconcievable that someone who bought in 2004 could own a home worth less than they paid for it. That would imply that the market had gone down over 35% from its peak, but the numbers don't show a single down quarter. As a buyer I'd lover for this to be true, but as my earlier comments alluded to I haven't experienced it first hand yet. Can you expand on your comments a little or shoot some holes in my logic? I'm obviously concerned about overpaying and am doing my best to discern the discount between list prices and the prices actually paid in completed sales. Thanks.

[gator girl]

cgcg, what we discovered after negotiating on a couple of houses, is that they remain on the market for longer, but prices don't change much. The first house the sellers went down 3%, the second... and hopefully the last, down 4%. The first had been on the market for a year. The second had been on the market for a month by owner, and a day with an agent. That agent got lucky!

[sheldonteam]

CGCC your Realtor should be giving you guidance in your price offers. Every neighborhood is different. A lot of buyers in 2003-2005 period saw there homes experience 30-100% gains. then they took out equity lines of credit. etc and now they owe more than it is worth. Many homes in Hampton roads are selling for 30% less than they were in 2005. I will give you a rough example of a Norfolk waterfront community. prices in 2003 200-225, 2004 325-400,2005 425-500,2006 525-600,2007 450-475 ,2008 399-425. The persom who bought in 2003 can still possibly double there money , the person who bought in 2006 is seeing a 30% decrease in value. As long as you do not have to sell , this community will come back . But every community is different. As for your offer , If the seller just bought it in Nov and fixed it up , it probably has not been on the market very long, and they probably bought it to flip it. so if other homes in the neighborhood are selling in that price range they are not apt to take a low offer. You are hopefully working with a professional, if not the appraisal on the home should offer you some protection to not overpay.