It is a good time to sell with the interest rates being low, the tax credit available to some buyers, and we haven't seen the last of the foreclosures as there is expected another round coming towards the end of 2010 from the ARM loans of 2006. So if you don't have to sell and hope to wait out the slight decline we've seen your wait may be awhile. Is your mortgage assumable? That will be another consideration as rates are estimated to rise by the end of 2010. Is your home staged? Staged homes statistically sell faster and for more. Lot's to consider and it all comes to your personal goals.

Your home does not exist in a bubble. You cannot rule out what is going on around you in evaluating the real market value of the home. Even if the agent helps you take a contract above the area comps, the appraisal may not come back at your contract value. Your sales comps should be current (under 90 days should work, although in an area with higher levels of distressed property sales, I would cut that time to 60 day comps) or they are no good to you. San Antonio got hit with a big whammy when AT&T decided to move folks up to Dallas. You don't have the corporate base to absorb that kind of exit, and it has left some neighborhoods completely upside down. We went through the same thing when telecom layoffs hit the Richardson, TX area hard about 8 years ago, and it took 18 months for the market to recover.

I got two emails saying my answer got the "thumbs up" so I came back to see what the answer was.

I'm going to guess the two people who clicked the button were agents who are tired of seeing this same sort of problem with overpricing without any concern for the client.

I hope it was. I hope that there are enough of us out there continuing to watch the markets, read the data, and work on helping the sellers understand that their house does have a price tag that sometimes doesn't match their needs or wants.

No one likes telling a seller there home is worth less than they thought/hoped it would be. It's gut wrenching at times, because you know these people put their lives into these homes, but the facts can not be escaped. The home isn't worth that much - and I (we) can show you the data to back it up.

Here in Texas it can be even more frustrating (as I'm sure some of my fellow agents will agree), because being in a non-disclosure state can sometimes cause the rumor mill to churn. Since we don't disclose sales prices publicly, often a neighbor will "hear" a house sold for $X, when in reality it sold for $Y (and the seller paid closing costs, did some major repairs, etc. that brought the effective price down to $Z). A Realtor® can show you those numbers, but the neighbor often thinks they know them and can cause more confusion and harm then good at times.

I share the story all the time (as I was quite proud of it), but when home sales were still a bit sluggish (not that they're flying off the shelves now), I took a listing. We priced it right and the home owners took great pride in their home (ie, it was spotless and perfectly decorated). We had three offers in eight days, two of which decided they wanted bad enough to fight it out. We sold the home for more than asking price in the end...in 8 days (I believe by the time we got the final contract hammered out it was 13 total days - both parties were traveling at the time, so we had to do a lot of phone confirmation of negotiations and faxing/emailing back and forth).

Why did a home in a neighborhood full of nice homes sell so quickly and for more than we were asking for?

Two reasons:

1. Priced in line with the market (some of the houses in the neighborhood had lingered for over a year).
2. Homeowners were willing to do what it took to make their home shine (clearing clutter, fixing minor things they hadn't gotten around to, keeping their home clean during showings).

It really does make a huge difference.

Matt Stigliano, Realtor®
RE/MAX Access
(210) 646-HOME
http://www.RErockstar.com
"Your all access pass to San Antonio real estate."

It's another day in the woderful world of Realty!

I have been looking for a crystal ball, but no luck. So...

Assess your priorities.
Assess your present realtor.
Assess your local market.
Roll the dice.

My gut is next year will be better, but if interest rates rise, that could change. People buy payment ultimately - higher rates equals lower sales prices, typically. Add to that the tightening mortgage market, I would seriously consider hiring an aggressive realtor (such as myself) and get the job done now, take your losses, and run...

Last question -- are you downsizing or moving up?
DannyT

Matt,

I couldn't agree more with your statement. Too many Realtors are so hurting for business that they would rather do their client an injustice and just tell them what they want to hear vs. what they need to hear. It's simply amazing. I just went to a short sale appointment last night. The sellers had already interviewed the "so-called" neighborhood expert and she just slapped them with a price right as she walked into the door... hello.. didn't even look at the house (she'd never been in it before) and the condition was horrible. I walked in last night with no comps as I always do so I could take my notes and now after looking this morning there is no way in H E double hockey sticks they could get the price she told them. Then to make matters worse, they are in a large financial crisis and the other agent didn't even care about that. What are we going to do w/ some of these agents Matt? :) Makes me wonder.....

Good to see you around here too buddy.. love your posts I'm reading.

Take care,
Josh

Josh,

Great statistics and explanation. One extra note I'd like to add to your note about this:

Well not quite. If you look at the figures closely, you will see what's going on. The average list price for the ACTIVE listings is: $278,139 when the average Sales price of SOLD listings is: $182,586! That's almost a difference of 35% to List to Sales price!!! That's HUGE!!

It does include REOs, shortsales, etc...but one thing you can't factor in easily is how many of those listing were overpriced to begin with. Unfortunately there are many people afraid to have the tough talk with their clients at times. We also have the agents who will take a listing at any cost - they just want the listing - overpriced or not. Time eventually makes everyone cave in and get realistic with their pricing, but the fact is I'm STILL seeing some pretty bad unrealistic prices out there.

I just made an offer on an overpriced listing recently and the seller countered back at full price. We countered again with a little bit more than we initially offered, but no dice. The agent called me to tell me they wouldn't go any lower (than full price). My buyer said no thanks and had to renew his lease for another 6 months (he had been holding them at bay while we waiting for an answer on our offer). Guess what happened last week? The home price was lowered - to below what we offered the first time around. The seller and the agent lost our business and now will walk away with less than what they would have had they not been hanging on to an overpriced listing. This sort of attitude helps no one - agents, buyers, or sellers.

Hopefully, we'll see more realism in the markets over time, but I fear there will always be those that "buy listings."

Good seeing you around Mr. Mayor.

Just a quick follow-up.

The absorption rate I was reflecting was based on one year of sales vs the CURRENT listed inventory. It showed that w/in one year's time San Antonio's sales surpassed what we currently have on the market. The current true absorption rate takes the amount of sales in ONE month vs the current inventory. The past solds in one month have been 1317.

If you take that figure and divide it by the current inventory, then you have the TRUE absorption rate of 11.6% or else it will take virtually a year to eat up all the inventory on the market w/out any additional listings to the market.

Hope that helps clear up a little misunderstanding from my last post. I guess that's what I get for typing and not reviewing before I click that nice little yellow "answer" button?

Thanks,
Josh

Good morning Stryder,

You have received some really "top-notch" answers below on what's going on. One thing that Keith pointed out that is a little interesting in relation to our market is the "absorption rate". Since Keith was giving out some figures in his market, that reminded me to chime in and explain a little more about what our numbers have shown us lately.

In San Antonio and ALL areas that our San Antonio MLS accounts for has some surprising results as I pull up the figures from today 10/6/09. Here it goes.

In the past 12 months, San Antonio shows that there have been 17,022 homes sold (all # of bedrooms and all price range). We currently also reflect that only 11,318 are currently on the market.
If you look at these numbers you would initially think.. "wait a sec.. San Antonio's market is booming!!" Because obviously that points to an absorption rate of almost 150%.. right?

Well not quite. If you look at the figures closely, you will see what's going on. The average list price for the ACTIVE listings is: $278,139 when the average Sales price of SOLD listings is: $182,586! That's almost a difference of 35% to List to Sales price!!! That's HUGE!!

In essense, the sellers that HAVE to sell are out there and they are pricing their homes VERY competitive (of course these figures reflect REO sales, short sales and all other types of distressed sales on the MLS) to compete w/ the others on the market and to get them SOLD! By the way, the average list price of homes that DID NOT SELL w/in the year was $227,262 which represents an expiration rate of 28%!!

If these figures (and numbers don't lie) don't make you convinced of how serious you should be if you plan on selling, then perhaps you will need to really consult hard with an experienced Realtor? I believe our market isn't really saturated with a lot more of overpriced listings because our Realtors here have been all doing a very good job of really consulting and explaining things to our sellers and reminding them that NOW is NOT the best time to "test the waters" if you catch my drift?

God bless and best of luck in your ventures.

You are not alone... (That phrase brings so much comfort.. unless you are in a horror movie...;-) ((which by the way, the current market feels a little like a horror movie...)

Last years value is irrelevant. Sorry - that's just the truth. Appraisal rles have changed, mortgages have changed and become less available, and Buyers are fewer for many reasons. It is a tough market. Granted, San Antonio has not seen the numbers that our friend from California mentioned -- ours are more like 10,600 homes available in the San Antonio MLS and 2520 have sold in the last 6 months... not near as dismal as many areas of the country. Still, that doesn't make you feel good, as your home is one of the many that just haven't sold.

Without doing the specific research, and of course, you need to be speaking to your Realtor, I can only say that conition is critical right now -- the best homes are selling first. Overpriced homes are not selling at all. I would venture to say that home prices have dropped between 5% to 15% in some areas - mostly depending on competition - specifically, builders and foreclosures.

Will next year be better? My crystal ball cracked - turns out throwing it against the ground is not a good idea... I say, check your motivation. If you need out - sell now, cut the price, condition up, and get it done. There are some great buys out there too! Next year could be better - but could get worse too.. especially if Congress passes some of the idiotic laws they are considering .. but that is another post for another time...

DannyT@kw.com

Stryder
I have read quite a few posts like yours "we'll take it off the market until it improves" or something to that effect.

Not knowing your particular situation ("don't really have to sell now") is always a red flag for top listing agents. They will normally not waste time with unmotivated sellers, or if they do take the listing, they don't invest any time or effort in selling it.

Some points to consider:

If you look at the link below it has some very interesting stats:
- 13,879 homes are on the market
- 527 sold recently
- That looks like it will take YEARS to absorb inventory.
- 2.139 foreclosures - just absorbing the foreclosures will take a couple of years.

One of the key reasons that buyers decide to buy is the interest rate/ According to most opinions that I have read, the belief is that the interest rates are going to increase because the Treasury Dept. stimulus money is going to run out in the spring.

The other big question is where are you moving? If you are planning to buy, is it in the local area or someplace else? Do you have any alternatives to moving?

I do not work in your market, but just based on the link below, it appears that your market will have a very long recovery. I certainly would ask your Realtor how many homes, like yours, have sold during the time yours has been on the market. That will tell you the truth about the market.

Good luck.

You are probably tired of hearing, "Depends on the neighborhood", but it does. If your home is not selling, examine its price per Square Foot ($/SF) compared to other similar homes (same size, same age, same builder, same neighborhood, etc.).

Compare its condition and appearance as well. In this market, the homes that are selling are in top-shape. They are professionally staged to compete with the Builder models, everything is repaired and sparkling clean. And they are priced right at market. The old game of try a high price, then come down until it sells, is dead. By the time you reach true market price, it looks stale on the market and all the Buyers wonder what's wrong with it.

By the way, an appraisal for refinancing is very different from an appraisal for sale. You can't really go on appraised value, except as one more piece of data to consider.

Finally, look at the number of homes like yours that have sold in your neighborhood in the last six months, compare that with how many are currently on the market, and you'll get a rough idea of how many months worth of inventory are available for picky Buyers to choose from. Then ask, "How do I get in front of the line?"

Usually the answer is price. By the way, while you may not get every dollar you want for your existing home, consider that the home you are planning to buy may be an even better bargain now than it will be when the market improves. Look at the difference between what you can get and what you have to pay, and you may find out that moving up is a very good strategy right now. Say, you get $10,000 less than you want for your existing home, but the home you buy is $25,000 less than you expected - That's a deal!

Good luck.

Doc Stephens, REALTOR®
Keller Williams Realty

Stryder,

There's a couple things to look at. First of all, if you're working with a Realtor®, you should ask them why it's not selling. Perhaps there's an answer in there that is being overlooked. If you're selling it by yourself, you should ask yourself the same questions - about price, neighborhood/area conditions, and marketing efforts. Marketing is a huge key and something some for sale by owner homes really miss out on.

You mention an appraised value. Is this from an appraisal company or your local tax appraiser. I ask this only because many people seem to feel they are the same thing - when in fact, they are not. Your local tax appraiser does not use the same information as an appraiser or real estate agent does and is only looking to find a taxable value, not a fair market value.

It is still a buyer's market, no doubt about that, but our San Antonio market has shown signs of moving towards a balanced market. If you don't have to sell, maybe it's not the time for you...but perhaps you want to sell. That's something you need to weigh. Many homes are selling and selling fast these days (I sold one recently in 8 days with multiple offers and took over list price), some are not. There are other variables to weigh as well.

Condition of the home is a huge issue I've been seeing lately. In a buyer's market, buyers become more demanding on the quality of the condition of the home. Even small things can cause them to walk away. Combine that with a sense of confidence amongst buyers that so many homeowners are in a position that they have to sell and you get a combination that leads to very picky buyers, because they feel there are 100s of houses that would suit their needs.

If your appraisal was a true fair market value appraisal, it might not matter anyway. Due to changes in rules for appraisals, the appraisals have tightened up and they're being a lot more cautious on values. That's not to say they're not finding a good representation of value, just that they are more detailed in their work than ever before.

Of course, not knowing much about your home or where it is, it is hard to give you any straight answer. I've had homes in perfect condition with a great price get little reaction - because of their location. Not every part of the city is performing the same and in some neighborhoods and streets it's different than the block around the corner. Having knowledge of this will help you (and your agent) guide everything in the right direction.

Check out some of the market statistics (with various variables that you can view under your control) here:
http://www.rerockstar.com/market-reports/

(If your zip code is not on the list, shoot me an email and I will try to get you some more detailed information on your zip code.)

Hope that helps!

Matt Stigliano, Realtor®
RE/MAX Access
(210) 646-HOME
http://www.RErockstar.com
"Your all access pass to San Antonio real estate."

PS Feel free to ask any follow up questions as there is a lot of ground covered in this one answer.

Hi Stryder,
The truth is that there are many homes that are selling for less that what the owners originally thought they would get. It is a sign of the market and no, you are not alone.

I would look at why you are selling right now, especially if you don't "have to". Selling later may provide you more of a profit; however there are no guarantees in the market as to whether your house will sell for more in a year or not. It's a gamble either way. Experts say it might be a long time before the housing market recovers.

If you want to sell your home, pricing and location is what will get it done. The market is what will drive the appraisal price and although your home may have been worth 285 a year ago, depending on what has been going on in the market in your neighborhood, your home may not be worth that much now.

Talk with your Realtor and have them explain to you what your area is doing marketwise and then make a decision based on what you overall goals are. I wish you the best of luck.

Brenda Mullen, Realtor®, ABR®
Home Team of America
210-807-0819
brenda.mullen@sbcglobal.net

It's impossible to predict the future. The general trend seems to be price improvement so--in general--you might be able to get more in a year. However, the economy could change nationwide, or it could change in San Antonio, and rather than prices rising, they could fall.

If you want to sell, sell. Be serious about it. Know what you want. Know what you need. Know what your plans are after you sell. Then go ahead fully committed. Otherwise, wait, and don't waste your time, as well as the time and efforts of your Realtor.