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This is an article from today's NYT, but it explains a lot of what I see in our market. As a buyer whose been kicking tires for several months, the same houses are sitting, sitting sitting. There is a lot of activity at open houses, but still few places get sold.
Homes get pulled from the market and relisted. Top shape homes that are priced well move fast, but that is only choice homes that are priced aggressively compared to others.
There was one place that has been on the market for months and months - we loved it, even though it needed a lot of work. The owners paid cash for their new place. They want to double their money from what they paid 6 years ago and refuse to budge on price.
I can more understand people that bought recently and are trying, sometimes desperately to get their money back, but when you've been in the house years - where does this "price" that you're sticking to come from? Is it because they have all added up their cruises and RV's and everything else with the money they thought their house was worth?
It's all about the sellers motivation. If they aren't in a rush they'll wait it out. If they are they'll price it to sell and it will sell quick. If they are stuck needing X amount, they'll wait to get X amount. It's nothing more than what the seller motivations are.
Go for new construction if possible. Im getting a brand new home
for less than what some of these older,crappy homes are asking. Its
incredible and great!
It's all about the sellers motivation. If they aren't in a rush they'll wait it out. If they are they'll price it to sell and it will sell quick. If they are stuck needing X amount, they'll wait to get X amount. It's nothing more than what the seller motivations are.
So take one example in my area: the owners move in in 1969. At that time, they remodeled the house to the 9's - wallpaper in every room, yellow and acrylic kitchen, mirrored walls, faux brick in the den.... It was listed at $475
It has been on the market for almost a year now. We got friendly with the agent - he told us they had a couple of offers when it was first listed at 390, which he thought was fair, but the sellers were firm.
They recently dropped the price to 450. We ran into the agent recently and she told us they got a cash offer for 400 and the sellers said No. What is the agent supposed to do? Nobody is going to buy that wallpaper and 1971 bathrooms for that price.
Where did they get their price from? Because two years ago someone in their neighborhood sold a fabulous place at that price so that is what their house must be worth? There is a ton of inventory. Their buyer is never going to come. At least, ah hem, I would be very surprised if it did.
I am not saying that every seller has to take the first offer that comes along, but if you have been on the market this long, the market is telling you something.
PS - the agent tried to resign them, but her broker wouldn't let her quit!
LOL... the sellers want to find the proverbial "sucker is born every minute"... current houses are STILL overpriced in their appraisals in most areas by about 20%... I don't understand the news that keep reporting drops in prices cause I don't see a drop in the appraised price in MULTIPLE locations... I think the news is trying to "jump-start" house purchases by misinformation... it is definitely still not time to buy a house... until the homes appraised price drop 20%, it is not time... however I have noticed that appraised home prices DID drop 10% over 2 years even though the news keep making it seem like its dropping 10% every month when it is not.....
Go for new construction if possible. Im getting a brand new home for less than what some of these older,crappy homes are asking. Its incredible and great!
If it's good construction it's great. Don't forget that some contractors tend to take shortcuts, and may be months to years before the new owner discovers how many and how serious the shortcuts are. There are too many possibilities to list, and financially it can be way, way worse than buying an older but sound home. I've seen brand-new construction with multiple code violations. You have to be just as cautious when buying new as when buying "used", unfortunately!
On the OP's topic --- no surprise that the primary example in the NYT story comes from CA. Those folks have only begun to feel the pain they're gonna feel before their market stops it's tailspin....
I think like Brandon said, it probably comes down to the seller's motivation. A lot of sellers are probably hopeful that when the credit crunch eases, the market will pick up again. Also, the "days on market" number for properties has increased, and many homeowners probably just accept that it'll need to sit for a while before it sells.
There's nothing wrong with a seller holding out for the price they think is fair. If you don't think it's a fair price, don't buy from them. That's the joys of the free market economy. Nobody is forcing you to buy, and nobody is forcing you to sell.
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