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Cathy Bureau, Real Estate Pro in San Antonio, TX

Do you think sellers are holding out for higher prices? There seems to be a listing shortage.

Asked by Cathy Bureau, San Antonio, TX Mon Apr 2, 2012

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We are seeing a drastic distortion in the perception of value in homes these days. What I see most of is three layers of sales comps in any given market. There's a distressed market made up of foreclosures, short sales, etc., a normal resale market made up of owner occupants who have kept their homes in decent shape, and a layer of freshly rehabbed houses which are selling at a premium. Most owners don't realize that if their kitchen is out dated or the house needs a new roof that they are not going to sell in the normal resale market segment and their property is now technically a distressed sale. These sales are normally around 50% of the fair market value in any given area. If an owner is hoping for market value on their sale they need to ensure that the condition of their house is comparable to market listings. There are an unprecedented amount of foreclosures on the market with a shadow inventory estimated to be 11 times the current inventory, many of which in fairly good shape but selling at steep discounts. The average owner is clouded by emotional ties to their property and it is more important now more than ever that as Realtors® we ensure that our clients are given an unbiased opinion of the property. The days of pulling a CMA in five minutes and arriving at a value are over, each property used to derive a value must be carefully examined. Honesty with your client is paramount and sugar coating the situation is only going to cause them to become frustrated and promote more problems in the real estate market.
1 vote Thank Flag Link Thu May 24, 2012
It does seem those who needed to sell have left their homes and now the bank has possession.
Those wanting to sell, but don't need to, are waiting for this message to be received by active buyers. "My home is FOR SALE not On Sale!"

When an additional 15% of of communities start showing upward trending arrows the scale will be tipped favorably toward the home owner. In the meantime, finding a quality home for a buyer can be a real chore.

Frequently, we are seeing the 'stare down!" Seller's position is "Bring a pile of cash to closing. I don't care what the bank appraiser thinks." So, before the seller takes the home off the market they need some assurance the buyer has the 'pile of cash' option.

It's an interesting time in the real estate market.
Best of success to you.
0 votes Thank Flag Link Wed May 23, 2012
When inventory goes down, as long as there is demand, prices have to go up. It's economics at work. We're seeing the same thing in our area and sellers are getting higher prices and multiple offers.
0 votes Thank Flag Link Tue May 22, 2012
In our area, the Las Vegas Valley, the listing shortage is artificially caused by the banks. 1.) There are more properties in escrow than are available. This is because short sales take so long to close, and are "on the books" as Contingent or Pending for months and months and months. 2.) There are thousands of homes that have been repossessed by the banks, or are in the final stages. However, due to the robo-signing scandal, the banks are afraid to proceed to the next steps in the process. We even had a property now listed as a short sale which was foreclosed upon and then a recession of the foreclosure transferring the property back to the owner, we can only guess from a bank mistake. Until this mess is straightened out by agreement between our state Attorney General and the banks we can't hope to see our inventory increase. We don't see many properties, except specialty properties, that are not selling due to refusals to lower their prices. What we do see is appraisers cutting the offers we do get, forcing further reductions in our sales, and lower sale price stats. Our foreclosure/deficiency stats are right up there at the top of the charts, so we're not sure this would be true for other markets.
0 votes Thank Flag Link Mon Apr 2, 2012
I have had sellers tell me they didn't care how long it took to sell, they really wanted to get their price. That said, after a few months on market without a showing, they usually lowered their price.
0 votes Thank Flag Link Mon Apr 2, 2012
Not being an economist, I'll still offer my Magic 8 Ball answer... DOM = 3 * 365 days to get close to 2006 prices. People have been hit hard so it will take a major shift in thinking to pay those prices again.
Flag Mon Apr 2, 2012
This is an interesting question. In South Florida there is also a shortage of inventory, and it is thought by many to be an indicator of market recovery. Since there were many foreclosures and short sales on the market, the comparable listings drove prices down. Now there are veritable bidding wars on these distressed properties, which is yeilding a slight increase in median prices. In our experience, sellers who are not distressed are still putting their homes on the market since it is, locally on an uptick. Speak with your area professional to get their opinion! Good Luck!
0 votes Thank Flag Link Mon Apr 2, 2012
Jose, this was a Agent2Agent post - I am a LREB (Broker)

All real estate is local; micro economics. There are 3 subdivisions that I work regularly and it seems that people are hesitant to sell. Normally in these areas there are 12-15 listings at any given time. Since November 2011 listings have slowed, buy buyers are coming out of the frost. I have to resort to door knocking now. I run around with comps on my ipad and that seems to matter. Some still say "We're waiting for prices to get back up there." Well, that might not happen for another 3-5 years. Patience is a virtue.

I see other valid reasons, that makes sense. I forget since many of my clients are 20% down people that many have VA or FHA loans with 0-3.5% down. No equity makes it hard to sell.

Love the comments, thanks!

Cathy Bureau
Broker-Owner
Green Home Realty
0 votes Thank Flag Link Mon Apr 2, 2012
depends on location. i belive there are many sellers who are looking to sell but would not profit or break even from selling, so they hold on until high market prices are commanded.
0 votes Thank Flag Link Mon Apr 2, 2012
If we only had a listing shortage in this area!!
0 votes Thank Flag Link Mon Apr 2, 2012
Cathy,

I certainly have seen this as well - people who bought four or five years ago in the boom now can't make enough money from the sale of that same house to pay off what they owe, pay closing costs and other selling fees, and come out ahead. That might account for some of the decline in homes on the market.

On the flip side, however, I think the supply is dwindling because more buyers are able to purchase again, thus depleting the supply of homes on the market.

Wendy
http://www.satxrealtor.com
(210) 749-6444
wendy@satxrealtor.com
0 votes Thank Flag Link Mon Apr 2, 2012
It all depends on the area you are looking for. if you are a Realtor, what I doubt, you can see there are thousands of properties in Bexar County and surrounding areas.
If you want to see all of them you can use: http://www.JoseSellsSanAntonio.com
Good Luck.
0 votes Thank Flag Link Mon Apr 2, 2012
Cathy,
If your area has a shortage of listings the answer may be that seller's understand this is a buyers market. Possibly they may not be able to sell due to being under water on a mortgage vrs the value of their home.

All the best,

Gary Geer

http://www.ggeer.illinoisproperty.com
0 votes Thank Flag Link Mon Apr 2, 2012
I think all owners are hoping prices go up. Many realize that they can't sell and make a profit so they must be holding tight and not listing. Back in the "good ol days" it was easy to find sellers with equity, today it is certainly more difficult so I would expect less listings. Maybe less is best and that will get prices to start increasing because of less availability.
0 votes Thank Flag Link Mon Apr 2, 2012
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