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QUOTE=JoeyPants;10703303]When sellers realize this, the housing market will bottom out. This is coming from someone who owns multiple properties.[/quote]
Actually, my house is worth exactly what I thought it was - I'm a seller who just went under contract and got exactly to the penny what I knew I'd get for it, and I sure didn't give it away either
It is good to hear that you got what you needed out of your home. Anecdotes are great, but don't necessarily reflect the true market. I see countless homes on the market priced 10-20% above peak prices. Unless a buyer is in a narcotic haze, these homes will not sell.
Quote:
Originally Posted by lovesMountains
QUOTE=JoeyPants;10703303]When sellers realize this, the housing market will bottom out. This is coming from someone who owns multiple properties.
Actually, my house is worth exactly what I thought it was - I'm a seller who just went under contract and got exactly to the penny what I knew I'd get for it, and I sure didn't give it away either [/quote]
America has too much invested emotionally in their homes. Houses are the only asset I can think of where it has a market value and an emotional value, and trying to separate the two when it's time to part with the asset leads to poor decision making.
I don't think human behavior will change overnight just because the housing market is good or bad. People will fail to cut losses if they must sell, keeping the markets from finding their natural bottom sooner.
It drove me nuts when I was buying to hear my agent say my offer upset the sellers, when in fact if they'd looked at the comps, the market trends, and their own bottom lines they'd realize my offer was generous.
When sellers realize this, the housing market will bottom out. This is coming from someone who owns multiple properties.
And many buyers (I won't paint with a broad brush here) can't afford as much as they think they can. Once they stop yearning now for those McMansions that they couldn't or wouldn't get during the boom, they find something that works for them now. Instead of being hard up for a bottom.
Hmmm, that last statement sounded kind of funny...
Houses, like anything else of value, are worth what someone will pay for them. To investors there are various formulae that can be applied to determine the likely return on a property and I have to say I have been fortunate to stick pretty close to these when deciding to sell my income properties. Cash in the bank still need to be invested and in some cases I could have done better but overall I am happy.
When it comes my personal residence I have an excellent idea of what others would pay for it both from my background and by carefully watching the prices of sold properties to compare. I know that the value of my home, based on comps, has declined significantly from its peak but it is still worth far more than I paid for it. I am happy to have this equity, both because of my large amount of down payment and from appreciation due to direct improvement as well general market forces in my desirable location. Should I need to sell quickly I would still net a handsome profit, though I am sure some of my neighbors that bought near peak would not.
The pace of sales is directly related to the health of both the local market and the national economy. It is difficult for one homeowner to effect either though it is smart for any home owner that need to sell or wants to get the possible price at any given time to present their home in the best possible light. It is further vitally important that sellers great a sense of excitement / scarcity of their home if they want to sell quickly / for a good price. Just as there are too many foolish investors that sell financial assets at or near market bottoms and buy too near market tops there are people do the same with their homes.
Smart investors, whether they are buying stocks, bonds or real estate will do everything they can to convince others to sell /buy when it is to the investors advantage!
When sellers realize this, the housing market will bottom out. This is coming from someone who owns multiple properties.
Actually, I am pretty sure i know the value of my home that i bought a month ago, and I sold my previous house for about 1% more than I thought I would, so I knew the value of that one, too.
Where I bought, homes that were priced appropriately sold within weeks, while there are many houses still hanging around that are 5-10% too high.
I think the difficulty people are having now is that many buyers are expecting to get houses for nothing, or at least huge discounts from asking, so sellers have to start higher than they want to get buyers to buy at an appropriate price. My point, there are just as many buyers in the dark as sellers.
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