Home Selling in Swampscott>Question Details

Mr. Incognito, Home Buyer in Massachusetts

Are sellers disillusioned about the current market conditions?

Asked by Mr. Incognito, Massachusetts Sun Dec 2, 2007

I've been looking at homes for sale for over a year now in Swampscott MA and have seen very little houses drop in price.

Given the current market conditions, the lack of buyers, and talk about how the worst is yet to come, why aren't sellers dropping their listing prices? Are they truly serious about selling their houses? Are they holding on to a pipe-dream (i.e. cashing in and making a profit)?

Help the community by answering this question:


Why bother putting your house on the market, when you can't get what paid for it only five years ago?

Mr. Inc . . . good points. To answer the above question, many sellers are willing to take a loss if they feel that the home they purchase is also at a decreased value and see a reasonable appreciation on that new home when the market picks up. It's similar to pulling out of a mutual fund and putting it into a fund that has a greater historical appreciation value.

I have a client right now who is willing to take a loss on his sale in order to find a newer, more up-to-date home that is more likely to see better appreciation in the future.

It's a confusing concept, but when u see it on paper it makes sense. However, like all investments there is an element of risk.
Web Reference: http://www.PatrizioRE.com
5 votes Thank Flag Link Sun Dec 2, 2007
Hello Mr Incognito Buyer - As a Seller familiar with the North Shore, i thought I would chime in. I just had my realtor run a market analysis of past 12 months for me so that I can check my pricing. Here's what is happening in my town: Inventory is stable at 8 months, no change. Days on market has lengthened slightly; prices have risen 5%. Demand remains strong in certain communities, esp seaside communities.
In my own town (not Swampspcott), many people believe that we have aready seen the bottom. We are not Florida, California or Las Vegas. New England is a different market. Have the realtor with whom you are working run the same analysis for Swampscott & it will give you a clearer picture.
5 votes Thank Flag Link Sun Dec 2, 2007
Mr Buyer in MA. Recognize that not all areas of the USA has been affected equally but the housing downturn. The unfortunate part about the national news is that most people think it's a national problem. Not so. There are some areas around NY where property inventories are so tight, buyers are standing in line to buy ridiculously expensive townhouses as soon as they pop on the market. As for MA, certain areas are in demand, while others are less in demand. Check with your local, friendly and knowledeable realtor who can advise on the specifics of your needs.
Web Reference: http://www.9723nflora.com
4 votes Thank Flag Link Sun Dec 2, 2007

I do love your name.......

There are definitely sellers who are holding on to a hope that there is a buyer out there who will pay them what they are asking (or near to that price.) There are sellers who list and are only wiliing to sell, if and when a buyer meets their terms. There are sellers who are content to sit tight, for a year, or two, or longer. They put their home on the market, and are willing to take it back off the market, and stay. It is their right to do so.

There are also sellers who very much want and need to sell, but hold tightly to a price that might not be realistic. Realtors sometimes walk away from these lisitngs, because they are overpriced. Other times, Realtors take the lisitng, but have in depth discussions about how overpricing negatively impacts the ulitmate sale price. Often, the only proof is when the market does not produce a buyer. Then, a seller begins to accept the message that the market delivers.

Some overpriced lisitngs represent unmotivated sellers; while other sellers really do want to sell.

For buyers, I suggest that they make offers based on the values they perceive represented in the property and have their Realtor submit supporting documentation for the offer price. That supporting documentation comes in the form of recently solds, current competition, and price trends in the recent months.

3 votes Thank Flag Link Sun Dec 2, 2007
Deborah Madey, Real Estate Pro in Brick, NJ
Swampscott is not a "subprime mortgage town" like Lynn or Revere. People in Swampscott are not going to be desperate to sell, and they can likely afford to just wait out the bad market. You might see bargains pop up in the next year or two, but know that the more exclusive north shore towns are going to be exempt from this housing crash.
2 votes Thank Flag Link Mon Dec 3, 2007

It appears that home sellers are in denial about the current market conditions.
2 votes Thank Flag Link Sun Dec 2, 2007
I live in the bay area and many sellers believe their home is impervious to a price drop even though all indicators and facts say otherwise. I think a lot of people are playing games, and just have their house up for sale and arent really serious about selling. This is why you see homes sitting around with marginal or no price drop for months at a time now.

Homes priced correctly that arent dumps are still selling. I saw some homes this weekend that were sitting around for a few months, and were over priced. I know because over the past couple of months, I have seen homes priced as much as 400k lower in much better condition and those sell quickly...usually within 30 days, but if you tried to explain this to the listing agent along with other economic indicators for price drops, they always come back with the same line of bull:

1. point out some other home in the neighborhood sold for XXXX$, and so therefore this house is also worth the same amount
2. their neighborhood is "special" and immune to the facts.
3. Believe the house they are trying to sell is actually move-in condition, when the only thing they have done to the place is paint, change carpets, and maybe add granite in the kitchen. This is what these sellers believe to be "remodeled to the 9's"
4. It is NORMAL for a house to take 3-6 months to sell.

And my FAVORITE line of BS:
5.They talk about homes in the area still getting "multiple offers" in the area over asking.

So now my husband is asking them why the home they are trying to sell doesnt have these elusive multiple offers. It is very amusing.

Bottom line is...you can put lipstick and perfume on a pig, but a pig is still a pig. I dont think sellers are ready to accept the reality yet, which is frustrating for both sellers and buyers.
1 vote Thank Flag Link Mon Dec 3, 2007
I think there are a lot of people who would rather gnaw off their right arm than take a loss on their home. What they know is that they bought their home for a certain amount, they have so much debt, and if they want to afford another home, they have to sell it for such a price. Most people aren't willing to believe or accept that they might not be able to get that price. They think if they just wait long enough, they'll get it. People will have to be desperate indeed before they would take a loss on their home, realistic market conditions or not.
1 vote Thank Flag Link Mon Dec 3, 2007
On Cape Cod, prices sold have not changed from a year ago. They remain steady, despite all the media hype of "doom & gloom"-serious buyers are out there and should be. The Boston Globe has not run an HONEST story about "the market" in over a year. Their press writing has been wrongfully negative -- I don't subscribe anymore.
1 vote Thank Flag Link Sun Dec 2, 2007
I have my house on the market since March, with OPEN Houses almost every Sunday for hours on end. I have dropped it 40,000. What I get" we are just looking, today, I had another no show appt, people that have kept their car running, rude "kids" slamming cabinet doors,kids running around the house unattended. My house is impeccable, in great shape, no pipe dream here, we bought a house and are passing in two weeks in another state. I am telling my real estate broker after today "serious buyers only" I am sick to death of the rudenss of people, if they don't have something better to do on Sunday don't come to my house to "just look". I am a serious seller, this is my home.
1 vote Thank Flag Link Sun Dec 2, 2007
Hi Mr Incongnito:

A lot of times, it also depends on the motivation of the sellers. In Marin, we have certain areas that have a lot of inventories, but the sellers are holding on tight. They believe that due to the great location, the market value of their homes will stay even or flat. Unless the sellers are anxious to move, there is no incentive for them to drop the price to sell just for the sake of selling; especially if they don't mind staying put if they have to. And they are right, I personally have great faith in Marn real estate market. So, that's that part.

However, with sellers that are motivated; Francesca's example brings something to mind (I am not really quoting her case, as I have not chat with her on her specific deal, but it brings a scenario in mind) -

A seller sometimes has a bottom line in mind, especially if the seller has enough equity in the house; then they will be willing to price the house lower than the competition. With an artificially low price, you will be able to generate interest and eventually getting higher price (even generate multiple offer situation); often times, depends on the price point, could be thousands of dollars over the asking price. Like Francesco said, this still happens quite often; and I have seen see properties go into escrow in just a couple of weeks and way over the asking price.

Another reason? The sellers are worried that if they lower the price, the buyers will still come in with a lower offer.

So the key is to keep your eyes and ears open, have your Realtor watch the market closly for you. Be agreessive and don't be passive - Don't be afraid of going in and make a lower offer - the key in this market or any market is to put things on the paper, then you can get your foot in.

1 vote Thank Flag Link Sun Dec 2, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
Right on Gail! A page right out of my listing appointment book!

The media is a buyers biggest enemy right now in some areas . . . giving everyone the idea that the nation is a buyers market. You may not be seeing them drop in the areas you are looking because the comparable sales do not warrant a drop.

For example, I just listed a property w/average days on market for their "neighborhood" of 40. Yes, I said F-O-R-T-Y DAYS. Thirty-eight, yes I said THIRTY EIGHT DAYS later we had a contract $5k above the seller's bottom line. All of this in a town that in general is referred to as a "buyer's" market. Well, not in this section.

Hopefully you are consulting with a local realtor regarding the conditions in that neighborhood so as not to be losing the house of your dreams and/or paying more it at a later date.
Web Reference: http://www.PatrizioRE.com
1 vote Thank Flag Link Sun Dec 2, 2007
Well some are…..

Actually I think that the Byers are disillusioned since they are always waiting to see a better deal while some good properties get snatched in front of them. All of the sudden everyone is picky and the homes built in 30’ 40’ and 50’ are too old. And few years ago that was not an issue. I even saw a listing where a home built in 1930 was listed as antique. No one wants ranches and splits and everyone wants a Mc Mansion for free. What used to be no problem like wall paper in the room, today is a big obstacle for buyers.
People do not realize that location is all that matters and everything else can be fixed.

The home is not an investment tool it is a place to live in.
0 votes Thank Flag Link Fri Dec 7, 2007
Hi Sara - I know exactly who you mean. In my town, there is a street of mostly dumpy houses for sale, on the way to the beach. There are realtor signs house after house, on both sides of the street, like a desperate gauntlet. Musty converted cottages trying to pass themselves off as year round homes at silly prices. If my home was on the the market two years or more, I would come to my senses. These are the houses that are causing the lengthening of Days on Market.
But as I noted in my post below, the market is surprisingly spry and prices have actually risen in my town this past year. AND - we also have many unrealistic buyers. Let me give you an example.
Years ago, I bought a piece of land from a woman, to build a seasonal cottage. I paid $15,000. She sold it to me to use the $$ as a down payment on a condo in Boston. BUT, she decided to wait a few years since she was certain the market was going to crash. Well, guess what happened to prices in those few years.... These friends are STILL telling me that the market is going to crash. In the meantime, that lot is now worth more than $100,000. (I sold it too.) And prices have gone up in the past year, while some buyers are still waiiting for "the crash". The crash was here - it just wasn't what the buyers thought it would be.
Mike from Cincinnati summed it up below very succintly. Markets are very regional, and within the region, certain towns hold up better than others. I think the current market dislocation includes a segment of unrealistic Sellers AND Buyers.
0 votes Thank Flag Link Mon Dec 3, 2007
Mr. Incognito
The key is questions I have is what measure are you using to calculate "very little houses drop in price"?
In most markets the measure is the median price, however if you have comparable properties, then you can make a direct apples-to-apples comparison.

The price at which a home sells is the price a willing, able, and knowledgeable buyer will pay, and to which a seller will agree. I agree with the seller, have your Realtor run some comps for you.

I do have a couple of questions:
Have ANY homes sold in your area?
What was the list price versus final sale price ratio?
How long were they on the market?

These questions might give you some ideas.

Good luck!
0 votes Thank Flag Link Sun Dec 2, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
Thanks, Ginger. Sometimes a fellow consumer's input weights so much more than a whole school of Realtor's (sad for us).

0 votes Thank Flag Link Sun Dec 2, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA

Not sure if the biggest enemy is the media itself or reality. I'd bet on the latter more than the former.

We are currently in one of the biggest real estate economic recessions in 15 years.

You are right. It does depend on the area. However, Swampscott MA hasn't had many buyers recently. Also, many sellers bought their houses when the market was better (and have paid higher prices).

Why bother putting your house on the market, when you can't get what paid for it only five years ago?
0 votes Thank Flag Link Sun Dec 2, 2007
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