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I have noticed that my area has been getting a lot of new listings over the past month. Half of them are short sales, the other half are regular. The regular listings are priced HIGHER than the sold comps. I think asking prices were actually lower last year (so the difference between asking and sold price was narrower). How could this be, if sold prices are going lower every month?
Example:
Last year home A would have been listed at 599. It would eventually sell for 499 because that's what the sold comps are.
Based on the higher asking prices I am seeing, this year home A would be listed at 650. But the sold comps are now LOWER than last year, so the market value would be 450 instead of 499.
I am really bad at math but this doesn't make sense to me.
Likely unrealistic sellers who don't listen to their agent's advice and the market data. Otherwise, are there any other factors in your area that might cause prices to rise? Less inventory (supply & demand), economic improvements, etc?
no, as a matter of fact, unemployment here is 12.5%, the local economy is still in the toilet, and inventory of homes for sale has skyrocketed since the new year. some of the things I am seeing:
1. people who are 100k or so underwater, who had tried to sell their homes last year, are now putting the home on the market again for the same price or a HIGHER price! meanwhile, prices have only dropped since last year!
2. people thinking they can still flip. something came on the market yesterday that was purchased (overpaid for) in 2008 for 540000. they listed it for 590000!
3. higher prices and more people doing price reductions instead of pricing the house correctly from the get-go
I listed and sold a log home in Gorham Maine in December 2008 for 193,500. Last week the new owners listed it with their buyer agent for 215,000 in the same condition as they purchased it. In 2009 the median sales price in that county declined about 6%. Need I say more?
Likely unrealistic sellers who don't listen to their agent's advice and the market data.
Yup to that - looks like op skipped right over your likely comment and headed to the secondaries which leads me to believe op's market may have some lowering - just taking notice to that which makes least sense and commenting on it while dismissing the things that do make sense.
Sellers never want to take a hit - some accept it - some don't/can't so pricing is sometimes a shot in the dark for them but they have to try something.
As far as the op's specific examples - all I can say is, why care unless a property is one you want to buy, if it is make an offer - otherwise no one here, or you will ever know unless they know the seller personally.
The reason that happens is because people are delusional. They "want" a certain amount out of the house so they put it on the market to "break even" even when the market won't allow them to break even.
People are pricing listings higher right now because of the tax credit. I think there is this perception that since first timers are getting money back that they will pay more for a house.
Well the press and government aren't helping much. Green shoots, great numbers and nuthing but roses and lollipops in the future. Job growth will take off any month now and the recovery will escalate.
Why wouldn't some sellers price accordingly if that's all they hear on TV and read in the MSM ?
they can list their houses as high as they want, but they probably will be forced to sell closer to actual appraisal anyway , unless they get an all cash offer and their's no bank loan that may be tied to the houses' actual value.
From a different perspective....This is a rare opportunity to sell now at a higher price. This will be the best spring market that we've had in the last three years.....People will pay more for your home if it is NOT a short sale, and their time frame is closing in ..... if they want to take advantage of the tax credit.
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