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BTW, how much lower of an offer is "acceptable" ? For example offering 400K-450K for something listed at 500K ?
I'm wondering if this trend is affecting Brentwood as well, as that market also appears to be somewhat slow right now.
user, the key to what TR said is that he and his Realtor ran the recent comps in order to justify the price they offered as well as understood the motivation of the seller. It's not just a matter of picking a number below what the list price is. You have a better chance of getting an offer accepted if you can justify the offer. Other factors also come into play which include: how motivated the seller is(i.e., do they have to move/sell); can the seller afford to sell for a lower price if it puts him upside down on his mortgage; what is the inventory; how long has the house been on the market; is it a relocation inventory home; is it a new home and the builder in financial trouble; is it a short sale possibility, etc., etc.
The same things hold for Brentwood but overall house prices in Brentwood are higher than Franklin.
Using your example of a house listed for 500k, you need to know whether or not that 500k is consistent with recent comps as well as understand the other factors I listed above. If it is consistent with comps and the seller is not in a must sell situation then an offer of 400k would not be considered very serious. If the recent comps indicate a value 50k less than the list price then you have something to justify a much lower offer. Basically, you and your Realtor must do your homework before making an offer to have the best chance of settling on a price that satisfies you.
There's something like 20 months of inventory out there today. We just bought a home originally listed for $639k for $405k. There are a ton of deals to be had, but for realtors it's tough since nothing's moving.
My rough estimate of drops from peak pricing is as follows:
0-$200k houses - 5-10% drop
$200-$300k houses - 10-15% drop
300-500k houses - 15-25% drop
500k + houses - 25-40% drop
These numbers are, as Big TR says, his observations. I am a Realtor and have to say that those numbers are not always that high. And sometimes they are pretty close. They change in area to area. I have seen some areas where the prices are down from their 2006 high similar to those numbers, but in Williamson County, up to 400K or so, the drop is not really higher than 15%. Sometimes it depends on how bad people want to sell. Some people are willing to go really low to get it sold and others, with really good properties are getting higher prices. The over 500K houses are taking a really big hit. They are easily 25% off. And more. And with the inventory available in the upper ranges, there are some great choices for buyers with the money to put down and the job to pay for the house. It is an interesting market. You may get the deal of your life or you may fall in love with the best house in subdivision and have multiple offers driving up the price! It is an adventure these days for sure.
These numbers are, as Big TR says, his observations. I am a Realtor and have to say that those numbers are not always that high. And sometimes they are pretty close. They change in area to area. I have seen some areas where the prices are down from their 2006 high similar to those numbers, but in Williamson County, up to 400K or so, the drop is not really higher than 15%. Sometimes it depends on how bad people want to sell. Some people are willing to go really low to get it sold and others, with really good properties are getting higher prices. The over 500K houses are taking a really big hit. They are easily 25% off. And more. And with the inventory available in the upper ranges, there are some great choices for buyers with the money to put down and the job to pay for the house. It is an interesting market. You may get the deal of your life or you may fall in love with the best house in subdivision and have multiple offers driving up the price! It is an adventure these days for sure.
Thanks! I agree it looks like some great deals exist right now....
As for asking prices, I haven't seen a single one which is below the previous sale price, even if the sale occurred in 2006. For example, I saw one listing asking for $500K for a house that was last sold for $495K in 2006, so I guess it's reasonable to offer less in this buyer's market (and recent comps were lower than 500K) , but on the other hand the 2006 price wasn't really outrageously "inflated" in my opinion since the prior sale 10 years earlier was for $340K (so barely 50% appreciation in 10 years, which sounds like a normal thing to me).
I guess my main confusion is about the assertion that prices are as much as 25% below. The question is 25% below what ? 2006 prices or more recent prices ? Comps in the area don't seem to be have declined that much (but there aren't that many recent comps).
How long do houses in this price range usually take to sell nowadays ?
Last edited by user123455; 04-08-2009 at 09:09 PM..
You are right Big TR, not a normal market - especially further out or the more unique. And sometimes, closer in. Just had a luxury home, in the heart of Brentwood, come down $340,000 to make sale for a great family. The feel like they have found a great deal as well. Still, like you, we went to the numbers to establish what reasinable was - not the asking price :-)
Unless you're getting data straight from the MLS or tax records, you should be a little careful of sites like trulia and zillow, for example, that give recent sales data or value estimates. While I commend them for giving more data in the hands of consumers, they are not quite there in terms of accuracy overall, that is. Yes, they may have a sale recorded correctly, but they are not going to have the most recent sales on there, which are the most important. The data is a little dated. There are a few other factors that skew things a bit, like the sources of the listings, etc. Overall, I think they've done great, but unfortunately, it causes more confusion sometimes than help and they have a ways to go before they can provide true "decision making" market data in the hands of consumers.
As for the different areas, it all varies and depends on what you're looking at. Are you looking at 2008 compared to 2007 or Q1 in 2009 to Q1 in 2008? City specific, or subdivision specific, price range specific, price per square foot specific, and so on. It's hard to give a clear cut answer because as I've analyzed different neighborhoods, some have actually gone up in average sold value from 2007 to 2008, for example, while some decreased as much as 12% or more. This year, so far, is a different story. So it is really tough to say unless you're looking for a very specific data set or it's based on your narrowed finalists for a home search.
You're right that prices in Brentwood, specifically, have not declined a ton lately as "a whole". For instance, the average sold price in 2007 was $690,303 in Brentwood (all types). In 2008, the average sold price was $654,598. So a decrease of about 5% from average sold price from 2007 to 2008. This year the average sold price is up over both so far, but that will balance out more over the remaining months with more data.
As for Brentwood homes between the price of $400k and $600k, the average days on market for those sold in 2009 so far, are about 112 days.
Unless you're getting data straight from the MLS or tax records, you should be a little careful of sites like trulia and zillow, for example, that give recent sales data or value estimates. While I commend them for giving more data in the hands of consumers, they are not quite there in terms of accuracy overall, that is. Yes, they may have a sale recorded correctly, but they are not going to have the most recent sales on there, which are the most important. The data is a little dated. There are a few other factors that skew things a bit, like the sources of the listings, etc. Overall, I think they've done great, but unfortunately, it causes more confusion sometimes than help and they have a ways to go before they can provide true "decision making" market data in the hands of consumers.
As for the different areas, it all varies and depends on what you're looking at. Are you looking at 2008 compared to 2007 or Q1 in 2009 to Q1 in 2008? City specific, or subdivision specific, price range specific, price per square foot specific, and so on. It's hard to give a clear cut answer because as I've analyzed different neighborhoods, some have actually gone up in average sold value from 2007 to 2008, for example, while some decreased as much as 12% or more. This year, so far, is a different story. So it is really tough to say unless you're looking for a very specific data set or it's based on your narrowed finalists for a home search.
You're right that prices in Brentwood, specifically, have not declined a ton lately as "a whole". For instance, the average sold price in 2007 was $690,303 in Brentwood (all types). In 2008, the average sold price was $654,598. So a decrease of about 5% from average sold price from 2007 to 2008. This year the average sold price is up over both so far, but that will balance out more over the remaining months with more data.
As for Brentwood homes between the price of $400k and $600k, the average days on market for those sold in 2009 so far, are about 112 days.
I believe that most published statistics about the housing market refer to median price, not average price. According to trulia.com the median sales price for Brentwood in Jan-Mar 2009 is $394K. The reason I trust Trulia's numbers is that they MATCH PERFECTLY with the numbers published OFFICIALLY by my state's association of realtors for the area I live in now.
I'm not sure what is the source of your numbers, but I would have to assume that the difference between your numbers and trulia's numbers for Brentwood is due to the fact that you quoted AVERAGE prices while trulia uses median prices. I believe median prices are a better indicator, and they show a decline of 11% so far this year compared to a year ago, and 23% decline from the peak median price of $510K reached during the last quarter 2006.
Of course, median price is... I wasn't trying to say average price was the right indicator. I was just giving an example of the number and figures I had literally at my side at the moment.
I was trying to illustrate the point that to answer more specific market questions you need to know more specifics about the collection of data. When you're looking at a specific house in a specific subdivision or area you need more data than the median prices for a couple of time periods for the city to help in your decision. Median price and how it's increased or decreased is great, but it's not the only indicator to review, as you know. There is more specific data, but what specific data is the question...and it varies depending on the situation. How it is run varies too.
Like I said there are some great things about the sources out there and some opportunities for improvement. Trulia is actually better with their sold data as a whole than their active listings data accuracy, but I don't see that they allow you to break that sold data into different ways of viewing it. So it doesn't give you too much detailed data analysis. Zillow is still outdated on sold data. On their site, they say the median sales price in Brentwood is $535,000. So we know that conflicts with trulia, and we know trulia is more accurate.
Neither should be used for the centralized list of homes actively available because of the way they are obtaining the actives. Also, neither should be used to determine the value of a particular home because you can't automate the valuation through algorithms...at least, yet. There are lots of different factors and ways to run the data that should be evaluated on an individual basis in terms of "market value". Still true, today, that is. I'm not saying it can't be done on a website automatically, but it hasn't been done effectively or accurately yet.
Of course all the value estimates for specific properties are inaccurate, and in fact I'm not particularly interested in them. What is more useful are the actual prices sold and the trend of price changes for the particular area where the property is located. I also realize that aggregate statistics for an area may not be applicable for a specific house.
For example, for this one listing I was looking at that sold for 500K in 2006, I was wondering if its price will also decline, like Brentwood's median price declined as a whole, but I realize that it may not follow the general trend exactly.
btw, where exactly do you see that zillow reports a median price of $535K for Brentwood ?
Last edited by user123455; 04-09-2009 at 01:58 AM..
TR..in your 1st post you said you were renting at McKay Mills? Then later said something about buying...
I was just wondering if you are renting or buying, and if you are renting, what made you make the decision to rent? (lower monthly pmt, etc?)Thanks~
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Price range drops
