We relocated to the Boston area in December 2006 and have been living in a furnished rental and paying for two storage units since. We thought for sure we would be in a house within months as we were in a "buyer's market" and are dual-income pre-approved buyers with no contingencies. We've been actively searching for a home, and have lost out twice on offers in which we were unwilling to enter a bidding war over properties that were overpriced to begin with. Within the (very) broad geographic area in which we've been searching, inventory generally is plentiful -- but not when it comes to well (fair)-priced homes.
A lot of the homes we've looked at were purchased at the height of the market and sellers are unrealistic in their expectation to make a large profit, or, unfortunately, many are just hoping to break even. Even with the sellers already taking a loss, a lot of the homes out there are just not worth the asking price. Many need updating, but are priced as though move-in ready -- any necessary work done to the house then puts it over its current value.
We did not make the profit we had hoped for when we sold our home in California, but we took the first (which is often your best) offer because (gasp) we actually wanted to sell our house. If sellers truly want to sell, they need to be realistic and understand that this is not the market of two or more years ago.
Last week we withdrew an offer on a new construction home in which we were already conceding to finish certain things ourselves at an estimated cost of approx. $20k, but even then the builder was stubborn in negotiations â€“ for a house had been on the market more than 300 days and on which we were the first offer. At $40k below the asking price, I would not call our offer "low-ball" - particularly considering our ability to close in less than 30 days and concession to finish work.
That, combined with the recent mortgage industry news, propelled us to rethink our position and choose to pull out of the market entirely and we're currently looking for an unfurnished rental property in which to wait it out. Are we making the right decision? Hard to say without the benefit of hindsight, but if the MA market follows the path of the So Cal market, I think that prices here have further adjustments ahead. I know other buyers who have recently decided to take a similar path, so it will be interesting to see the affect on the market after the dissipation of the wave of buyers taking the opposite approach (i.e., "get in while you still can").
There are so many houses on the market that have been listed for more than 100 days and have not reduced once that I can't help but wonder if this is driven by the sellers or the agents representing them. I would hope that agents are attempting to convince their sellers that their outdated home on a busy street is not going to garner the same price their neighbor's home did a year ago. Itâ€™s a bummer, I know, but timing is everything. Also, most listed homes could greatly benefit from even some minor staging (as mentioned in a previous post). I am in awe of the average home on the market. I marvel at the design decisions and wonder where their realtor has been and whether or not they have cable access (HGTV, anyone?). I would estimate that at least 50% of the homes out there could cut their time on the market in half if they put some belongings in storage, repainted, and put a little thought into how their home is being perceived by buyers. Most buyers can't look past all the clutter, toxic pink walls, or rooms crowded with furniture to see a spaceâ€™s true potential. If you have a seller who is resistant to a price drop and has the luxury of time (as most seem to), I suggest working with the seller on staging their home first. If that doesnâ€™t make a difference, then they can drop the price.
One last tip: When taking photos for the MLS, please focus on the actual house. The internet is a great tool and we as buyers completely rely on it, but it can work against a seller. I look at real estate listings daily, but it never ceases to amaze and amuse me as I peruse listings to see multiple photos of furniture, stuffed animals, rugs, pictures, etc. -- last time I checked, I was interested in buying your house, not Aunt Gertrude's throw, your belongings or your pets! Although your landscaping is beautiful -- how about a shot of the bathroom? And if there's a valid reason for that, how about a price drop?
To answer your question -- this is where your buyers are. As agents, please work with your sellers to bring us something that's presented well and fairly priced -- and we will actually buy it. Most of us are qualified, we want to buy, and we're ready to buy...but we're just not going to buy that...at that price.
Unless something changes, see you next spring after the March mortgage adjustments!
As challenging as this market has been, there is yet another twist. We're seeing buyers with good credit scores and pre-approvals from their mortgage brokers losing money because the lender decided to get out of the mortgage business.
Coldwell Banker Residential Brokerage
.I think every market is different but overall you have heard from a number of buyers who are essentially saying the same thing.. they are not going to buy anything just because it's there. I am working with buyers who are well qualified but the don't want junk . They want it in good condition. They do not want to get into multiple offer situations. They will not pay more then they deem to be market value. Most have set a realistic figure about what they can afford and plan to stick to it.
They are concerned about where the market is headed but are willing to buy because they have realistic expectations. They do not expect to make a profit in 6 months. They know what they buy today is something they will live in for at least 5 years.
So where are the buyers... they are everywhere..
We hold a minimum of 7 training events per week in our office and much of that training right now is on PRICE REDUCTIONS and SCRIPTS/DIALOGUES. In our area of Southern California, we are experiencing approx. a 30+% decline in sales from 2006 and with listing inventory almost double from last year, buyers are able to be more selective. Bottom line...if it's not priced right, it will not sell!! There are buyers our there, but those over priced listing are not ever going to see them because why should a ready, willing and able buyer look at a home that is $20K, $30K, $40K or more over priced, with so much inventory to choose from. Only 4% of our listing inventory is selling right now (in our area), so I would be asking my sellers, "Mr. and Mrs. Seller, do you want to be in the 4% of homes that are selling right now, or the 96% of homes that are sitting?"...and then be quiet...let them self discover their answer. Also, KNOW YOUR NUBMERS. We can not educate our selles if we as agents don't know our DOM, Avg. Sale Price, Inventory, Percentage of homes selling, etc. In this market we are EDUCATORS, not sales agents. The sales will come if you do your home work and work with the MOTIVATED and REALISTIC seller(s). It's all about PRICE and the sellers MOTIVATION for moving. If they are not motivated sellers....my answer would be NEXT!
Just my two cents...
Seems that the market has a way to go -- and while I know I can't perfectly time the market...my personal observation is that list prices are stabilizing...perhaps on the way down! If I'm wrong in the short term...well, I'll likely buy in the next year and it's hard for me to believe that the 1-year appreciation will be great enough to make me regret my decision.
I have been to open houses lately that 20 or 25 people show up.
I'm swamped right now and you will be too since buyers are FINALLY waking up to the many excellent opportunities to get into a house for a reasonable price. The tables have finally turned and wise buyers know this.
Buyers are in a wait and see mode.
Those Buyers who have to buy now are asking for the sky because the market is over stocked with inventory. In some cases I have herd thay they had a three year supply at the current sales rate. What worked last month will not work this month. Good Luck!