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"I am interested to understand why many of you think that prices will continue to drop this coming year."
For the coast-Winter time,Things slow down. Prices come down. Sellers want to sell-Especially the ones that have had their property on the market all spring and summer. Statistically speaking the lowest prices (and fewest sales) are during the winter time.
March (traditionally) is the big "spike" month.
I cringe whenever I see/hear folks trying to apply a formula/percentage to their offer. That's based off of guess. Think about it. What if the seller has his property 50% too high and you "low ball" him at 15% under what he was asking.
If you are very serious about a house aand do not trust your broker (Ah, yes-In lies the rub-The mistrust of the professionaal you have contracted)-Then hire an appraiser ($3-500) If you are financing the home then it's going to be required. Ask your bank if they will accept the appraisal if you put an offer in-They more than likely will.
Also remember-That the Offer to Purchase and Contract has as a part of the offer that the appraisal must meet or exceed your offer.
The points
Formula's are not smart.
A buyer needs a dependable method for determining value of a home before an offer is made. If you don't trust your buyers broker then contract an appraiser. A buyer's agent legal responsibility is to look after the buyers best interest.A listing agent is not necessarily a dependable or accurate source for determing value of a home. A listing agents legal reposnisbility is to look after the sellers best interest.
If you don't think that the broker has acted in your best interest-Forget the Board of Realtors-Go straight to the NC Real Estate Commission. They do not, repeat-Do Not play around and are always looking after the consumers best interest.
bill , you are right as far as the percentage game.
i did put % on our buy , but in reality we believed that the house we were buying was way over priced, this was after looking at all the comps.
in other words the seller 's head was still stuck in 05/06 prices .
we let the seller have some time to think about it , we knew we did not want to go over a certain price for that particular house. it took him about three weeks.
and we did not forget about the appraisal having to meet or exceed the selling price.
did not mean to feed into the " how low did you buy " percentage game.
movedtothecoast-You stated the number one reason why sales have continued to decline when you said, "seller 's head was still stuck in 05/06 prices"
Price and value are relative. Always have been, always will be.
Bill
From a sellers point of view.........all these comments about sellers and real estate agents are way off.
We built our house in 2006 on a lot we bought in 2003. Adding the actual cash value of the lot, (what we actually paid for it without the equity it made in those 3 years, from 85,000 cash to a tax value of 180,000 in 2006), and the cost to build the home, without all the extras put into it later, over 500,000. It is listed to sell at 439,000 today. Do the Math.
We certainly are not living in the 2005/2006 price frame, we have listed the property realistically and at a substantial loss of cash and not equity. Telling people to "low ball" offers is an insult to us and the agent we are working with who explained quite clearly that we would have to sell it much lower than it cost to buy because of the recession and the current housing market.
Therefor do you think it is reasonable to make offers up to 20% below asking price?
Not everyone has their house on the market at an unreasonable price and we should not all be clumped together as being "greedy", our house is listed at a fair market value and will appreciate in value in years to come to the next owner.
As to the question of making an offer, most of us can see value for money once we step into a property and the view from the home is usually priceless here on the coast, house prices are beginning to stay steady and once the crowd that is sitting on the fence decides to make the jump back into the market then houses will begin to move again.
Not everyone has their house on the market at an unreasonable price
I didn't said they did. I deal with buyers and sellers on a daily basis. The homes that sell are the homes priced for the 2009 marketplace.
There are a lot of fantastic opportunities in all markets (I have addreseed this before). The mistake folks make is to think in terms of a market as a whole and neglect to look for the "deals" that are out there-sitting by themselves. These are individual situations just waiting to be bought up.
Bill
Thanks for all of the advice although I am interested to understand why many of you think that prices will continue to drop this coming year. It seems to me that activity is picking up in the Oak Island and Holden Beach area and the news media seems to suggest that we are "near the end." We are presently evaluating a few homes and trying to evaluate price, budget and our own utilization. I agree that the future of the North Carolina coast is excellent since the local areas (Raleigh and Charlotte) will continue to grow and people will always want to visit the beach.
Bill already addressed this and he's dead on but since I work in Brunswick County I'll let you in a lil free info. The WORST beach market in Brunswick County is Oak Island. The second worst is Holden Beach. Both beaches have lost considerable value during the PEAK of the selling season which is early spring to now. Beach houses sell best when it's warm or about to get warm. We are heading into fall which is when fewer people are looking to buy a beach house and more folks are looking to sell a beach house. Now if prices were falling during the summer months, what do you think they will do during the fall and winter with more supply and less demand? My prediction is that they will fall even faster.
In a "normal" real estate market, there is usually about a 1 year supply of homes on the market at any given point in time. Oak Island currently has a 4 year supply of homes on the market. Huge supply + decreased demand = lower prices and that equation isn't going to change soon.
From a sellers point of view.........all these comments about sellers and real estate agents are way off.
We built our house in 2006 on a lot we bought in 2003. Adding the actual cash value of the lot, (what we actually paid for it without the equity it made in those 3 years, from 85,000 cash to a tax value of 180,000 in 2006), and the cost to build the home, without all the extras put into it later, over 500,000. It is listed to sell at 439,000 today. Do the Math.
We certainly are not living in the 2005/2006 price frame, we have listed the property realistically and at a substantial loss of cash and not equity.
You told me a few days ago that you built a house, in Wilmington, on a golf course in '06. This is a thread about beach houses. There are no beach houses in Wilmington, and there are no golf courses at the beach.
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Telling people to "low ball" offers is an insult to us and the agent we are working with
Good luck with that perspective.
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Therefor do you think it is reasonable to make offers up to 20% below asking price?
Sometimes, yes.
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Not everyone has their house on the market at an unreasonable price and we should not all be clumped together as being "greedy", our house is listed at a fair market value and will appreciate in value in years to come to the next owner.
I don't think it's possible to list at fair market value. You only know what fair market value is once the home sells.
I don't think it's possible to list at fair market value.
An appraisal is an estimation of value at a specific point in time. That specific point in time is the day the appraisal was done.
In any market, at any time-Always think of a home value just like the ocean tide. A) It is always moving and B) You have periods of high and you have periods of low-But it is never static-Never holds still.
Bill already addressed this and he's dead on but since I work in Brunswick County I'll let you in a lil free info. The WORST beach market in Brunswick County is Oak Island. The second worst is Holden Beach. Both beaches have lost considerable value during the PEAK of the selling season which is early spring to now. Beach houses sell best when it's warm or about to get warm. We are heading into fall which is when fewer people are looking to buy a beach house and more folks are looking to sell a beach house. Now if prices were falling during the summer months, what do you think they will do during the fall and winter with more supply and less demand? My prediction is that they will fall even faster.
In a "normal" real estate market, there is usually about a 1 year supply of homes on the market at any given point in time. Oak Island currently has a 4 year supply of homes on the market. Huge supply + decreased demand = lower prices and that equation isn't going to change soon.
Any thoughts on why those two beaches have done so poorly?
I don't think sellers should be offended by a low-ball offer nor should buyers be afraid to offer one. It's a large financial transaction - everyone needs to look out for their own needs. Hence I also said that if it is unacceptable to the seller, they will counter. It's not about accusing sellers of greed. But I also think it's a great time to take advantage of market conditions.
Someone else mentioned to offer what you are comfortable with - I totally agree. Even if you overpaid a wee bit, if you were happy with your offer then all is well. Same if you get a deal. (classic rule of bargaining in many countries!)
I'm getting ready to put my house on the market in a few months. I fully expect to receive low-ball offers, and it won't bother me in least - but maybe give me a chuckle! I also know what my lowest price point is. And I'd rather keep it as a rental for a year or so if I can't receive an offer I'm happy with.
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