March 7, 2006 at 9:36 AM #6402North15Participant
I have had a few interesting comments recently made directly to me by San Diego realtors or passed on from friends.
Comment on about 2-15-2006 to seller attempting to list Ramona home with realtor: Your selling price is too low, we will not list it unless you raise the asking price to xxxxxx .
Comment on 3/5/2006 to potential buyer at open house: No calls/no offers made on North County home in October/November/December. Seller believed market would pick-up after 1st of year, raised price by 10% in January….still no offers.March 7, 2006 at 2:17 PM #23597
I checked in w/ my realtor yesterday, to get the scoop on the market, and she told me that they’ve been telling sellers to lower their prices, but sellers don’t want to do so. They know what the last comp was, and believe they can get that too, and are willing to wait. Exceptions are motivated sellers, those who must sell for job move, divorce, whatever.
She said that those homes that sell are either listed for, or getting offers for, about $20K less than they would a few months ago. When I asked her for pricing, I figured out the reduction was about 2 – 5%. The other homes are not selling.March 8, 2006 at 9:05 PM #23613sdduuuudeParticipant
Seems like the market is in a “Mexican Standoff”
Buyers are waiting for sellers to come down.
Sellers are waiting for Buyers to offer bigger numbers.
Who flinches first, I wonder.
Inventory grows, but not to record levels.
Sales fall off.
The median price doesn’t move much up or down.
This is what the “top” feels like.March 8, 2006 at 10:07 PM #23616BugsParticipant
With as many listings as are on the market right now, time is on the buyers’ side. The long term interest rates could drop to 2% tomorrow and it would still take a while for the market to absorb that many listings. All a potential buyer has to do is wait it out. There WILL be some forced sales – including foreclosure sales – and each successively lower sale price will set the bar lower.
I think a broker who takes on any listing that is not at least 5% under the rest of its competition is wasting their time right now.March 8, 2006 at 10:23 PM #23617
Well, how do you get the sellers to agree to a listing that is 5% less than what their neighbor got last summer? The sellers don’t “get it” yet.
Perhaps you can relate by imaging how you might price a car which you’re selling privately. The ideal listing price is the Kelly Blue Book trade-in value + 5% or 10%. The trade-in value is what the dealer would give you. Make sure you select “fair” condition, because that’s what the dealer uses. This way, you get more than the dealer would pay you, and your buyer pays less than the dealer would charge.
But, as my brother and husband are finding out, sellers advertise their cars for the much higher “private party” value. My brother did this also, and did not get a single call for his car (except from a pre-recorded auction type place). He ended up selling it to the dealer for the trade-in value as part of another purchase.
My husband has checked countless car ads, and finds that sellers have them priced at that too-high private party value. So he keeps looking.
This is the same that happens with housing, as buyers take their time to find the best deal, and sellers refuse to take less than the maximum imagined amount. And if they are not forced to sell, they will hold onto that imagined value, and possibly reduce by $5K increments. Only those who are really motivated will take a lower offer.
A couple in my neighborhood is getting ready to list their townhouse, and were told by their realtor that it’s worth $575K. Gee, then why are the other 2 for-sale units, listed at $550K, still sitting on the market? The realtor was checking the last closed sale, and not adjusting for a declining market. Maybe she told her sellers she could get them a higher price, just to get the listing. I get so annoyed that other people are prolonging this slide down! But I am powerless over them, right? This takes too much patience.March 9, 2006 at 7:59 AM #23619North15Participant
As I referred to in the first post, a friend mentioned to me that his first attempt with a realtor to list his Ramona property at 5% below the local market was met with a “no” by the listing agent. The realtor would not accept the listing unless the seller agreed to raise the price. The seller was attempting to be realistic to the current market conditions in terms of timing retirement plans.March 9, 2006 at 8:43 AM #23620
Why would a realtor refuse to list at a lower price? My realtor would have been thrilled to list competitively. What is that realtor’s motive? Realtors only get 1% of the 6% commission, so a $20K reduction in price would net about $200 less in her pocket. Is she trying to get that extra $200, or does she or a relative have a house in that neighborhood and doesn’t want the comps to go down?
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