February 22, 2006 at 5:08 PM #6381teatsonabullParticipant
Per ZipRealty, 4,863 of the 17,042 homes available for sale (a/o 5:08 p.m. 2/22/06) have been reduced. (hence 28.5%)
I wonder if anyone knows what percentage of homes a year ago were sold after being reduced? I’m guessing that with all the bidding wars and speculative frenzy, the number was close to zero.
Does anyone agree that this is an important statistic to watch?February 22, 2006 at 7:58 PM #23464Jim BrubakerParticipant
I think that its a good acceleration indicator.
There are some tricks here that you are overlooking. A Realtor can withdraw the listing and then resubmit it as a new listing with a lower price. That way it won’t show up as a reduction.
A second thing that happens, the Realtor will list the price at some ridiculously high amount. Then he lowers it to a more reasonable level but still quite high. In walks the man with the ego who wants to go a little lower to his price or nothing. Bang you got him.
Another item I would like to figure out a way to track are the FISBO’s.February 22, 2006 at 8:27 PM #23465barnaby33Participant
Does FISBO = FSBO?
JoshFebruary 23, 2006 at 7:51 AM #23471Jim BrubakerParticipant
Yes lol, I just spelled it the way it sounded–brain fogFebruary 23, 2006 at 8:40 PM #23481
The other thing that doesn’t show up as a price reduction but which actually is a price reduction is when there are sales concessions. The list price stays a $750k but the seller will offer a $10,000 credit for closing costs or new carpets, etc. Bang – the realty agent gets to keep the recorded sale price at the $750k even though the real price was only $740k. I think we’ve just begun to see sales concessions. By the time we get done I expect those concessions to get quite creative as the realty agents do everything they can to maintain the pricing structure.February 23, 2006 at 8:53 PM #23484powaysellerParticipant
In my personal experience, resale homeowners don’t make concessions, only builders do. When my offer came in 5% below listing price, my realtor did not suggest that we raise the price and offer a concession. The buyers wanted the lowest price. My realtor told me of 2 sales in Poway, one where they represented the seller, another where she represented a seller adjacent to the “low” sale, and both those sales came in much below list and were accepted as such. No concessions on those.
Also, realtors only earn about 1% – 2% of the 6% commission, so an extra $20K added to the sale price is only $200 – $400 more for the realtor- not a big deal. I don’t think the realtor cares for how MUCH the house sells, only that it sells and closes escrow.
I think buyers can’t qualify for the high loans anymore, and are looking for a good deal, so they make lower offers. I think only the builders are throwing in concessions.February 24, 2006 at 10:32 PM #23498
You probably sold at a good time. Had you waited any longer your “losses” may well have mounted. You would definitely have faced more competition. If you were selling now I can almost guarantee your agent would be mentioning concessions, if only in casual conversation.
Concessions are indeed showing up now among resales. I’m seeing more houses being sold with furnishings, more flooring and painting allowances, and more offers to pay closing costs. Some of the realty agents are so desperate to hold the line that they’re even including these offers in their MLS listings. Up until now they were kind of keeping it hush-hush.
Their incentive has nothing to do with their share of the commissions. The realtors’ problem is that if they can’t sell the “real estate only goes up in value” illuision to their buyers they won’t be able to keep the volume of sales going. Nobody wants to buy in a declining market unless its at a steep discount. I’m sure most of the smarter agents would be happy to give up a lot more than a measly $400 if it means they don’t have to acknowledge a declining price structure.February 25, 2006 at 9:36 AM #23502
By the way, not only are listings being reduced, but a large percentage of the sales are closing at the bottom of or below the listing ranges.
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