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I've been on the market for a house for a good while now. And all I have heard ad nauseum is that it is a buyer's market. Well, someone didn't get this message over to the sellers. I don't think it is a buyer's market but rather I think there exists a stalemate between buyers and sellers. I think there are two main categories of people:
1) People who refuse to accept the realities of the economic climate/real estate market. I think these people bought their homes when prices were low (80s, 90s) and didn't put much into their homes. While perhaps their homes are clean and well maintained, stepping foot inside is like stepping foot inside a 1985 model home. Now the home is outdated, older, and a bit more worn. However, they cling onto the thought that they can "make a ton" when selling their home and that Jane down the street, who sold her house 6 years ago, doubled her money, so why shouldn't they? They paid $200 K and now want $400 K for a home they put nothing into because others got that 5,6,7 years ago.
2) People that overpaid for their homes or bought their homes during the prime of the real estate boom and as a result, they have a severely overpriced listing price. They might have paid $500K for their home in 2005 and are now looking to begrudingingly sell for $460K, not realizing a fair market value in today's market might suggest a listing of $380K.
houses here have been coming on and off the market and back on. many owners dont want to accept that their homes are no longer worth what they thought they were. but some do and those homes sell eventually. be patient, they will come down.
I can tell you I had more houses to choose from than I could even fathom going to look at when I recently purchased. And prices were dropping on a daily basis.
I've seen people (inlcuding my own offers) refuse to accept an offer that is only a few thousand below their asking. I mean, why are these sellers haggling over pennies? It wasn't uncommon to drop tens of thousands of dollars years ago (before the housing boom) off of listing prices.
And one of the most common answers I get when I point out the issues with someone's asking price is what you COULD do to the house. I based my offers on comps and condition of the home. If someone is asking for more than better comps have sold for in the same general area of even street, I drop the offer accordingly. And then I hear but you COULD renovate the kitchen, you COULD renovate the bathrooms, you COULD build an addition, etc. Well I COULD build a house of gold if I wanted to but that's not reality. And neither are most people's asking prices.
houses here have been coming on and off the market and back on. many owners dont want to accept that their homes are no longer worth what they thought they were. but some do and those homes sell eventually. be patient, they will come down.
I've seen this as well. Noticed a house, saw it dropped from the listings, and then see it pop back up months later with a ridiculous drop in the listing price of 3 K or something asinine.
I feel bad for realtors. I've seen people go through realtors like water thinking it's the realtors fault for their home not selling. IT'S THE PRICE!
i can tell you i had more houses to choose from than i could even fathom going to look at when i recently purchased. And prices were dropping on a daily basis.
There's a buyers market and then there are buyers who think they can get away with murder and are unrealistic too. Happens on both sides.
I would agree with this.
I would think that depending on the home and the listing price, it is fair to start with an offer of 5-20% off of the listing price and go from there. If a home is in great condition, I could generally suggest less...perhaps only a few percent if the listing price is reasonable.
I dunno. There's still a market at play. People may be willing to wait to get the price they want. They might not need to sell at this minute.
For your second example, in a sale like that people are going to have to come to the closing with cash to pay off the loan. Unless they really need to sell, they may be willing to wait, rent it out, or just not move.
I haven't looked at the numbers in a while, but I remember back during the crash, lowballs really weren't getting accepted. What was more likely to happen was that sellers themselves had to lower their price to the what the market was willing to pay.
On the other side of the equation, I also think that there are unrealistic buyers out who think they should be able to get a 4br center hall colonial in Ridgewood with a shiny kitchen for 400K and that's apparently not going to happen right now.
I've been on the market for a house for a good while now. And all I have heard ad nauseum is that it is a buyer's market. Well, someone didn't get this message over to the sellers. I don't think it is a buyer's market but rather I think there exists a stalemate between buyers and sellers. I think there are two main categories of people:
1) People who refuse to accept the realities of the economic climate/real estate market. I think these people bought their homes when prices were low (80s, 90s) and didn't put much into their homes. While perhaps their homes are clean and well maintained, stepping foot inside is like stepping foot inside a 1985 model home. Now the home is outdated, older, and a bit more worn. However, they cling onto the thought that they can "make a ton" when selling their home and that Jane down the street, who sold her house 6 years ago, doubled her money, so why shouldn't they? They paid $200 K and now want $400 K for a home they put nothing into because others got that 5,6,7 years ago.
2) People that overpaid for their homes or bought their homes during the prime of the real estate boom and as a result, they have a severely overpriced listing price. They might have paid $500K for their home in 2005 and are now looking to begrudingingly sell for $460K, not realizing a fair market value in today's market might suggest a listing of $380K.
Thoughts?
I couldn’t agree more with your assessment of the current mind set in the real estate market. However, things are very different nowadays. It will take some time for the general public to accept that homes are no longer an investment, but rather a consumer’s good; just like a car or other similar items. About six months ago, I went to see a house for sale in Cranford. The seller, an eighty six year old lady, said that she bought the house back in 1954. She also mentioned that her and her deceased husband paid $ 34,000 for the house. When we went to see it, the house was a time machine capsule. Everything in it, meaning, furniture, kitchen, appliances, and the rest of it was from 1959. The asking price was $429K, and we were completely astonished to find out that the asking price was firm. The house has been paid off; however, she feels that it’s worth the asking price. It will take another $70K or more to update and fix the house and make it livable. On the other hand, I also feel that the influx of New Yorkers moving to New Jersey has helped in keeping prices up. I’m always amazed to read threads in city data about people moving (always from New York) and looking for homes with a budget of $650K. This trend has obviously priced out many of us.
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