An article in today’s Globe has some great bits:
During years of record house-price gains in Massachusetts, a prospective seller would examine “comps” — reports prepared by agents listing comparable houses that have sold in the prior six to 12 months — and then determine how much more he could get for his home.
This is true. Often, the seller would ask that the property be priced at, or more likely, higher, than comparable properties, because prices were appreciating, so quickly. And, the seller would be disappointed with any agents who said that price was unrealistic, going with the highest estimate. And, to a certain extent, those agents would be proven wrong, because the property would end up selling at the inflated price!
During the past several years, I’ve had many buyers who, when seeing the real comps, would say to me, okay, I want to offer a lot less than full-asking. I’d do what they said, but knew what the result would be.
Most often, the sellers’ agents would hear my offer, sigh heavily, and go, “But, why is it so low?”, like, almost crying.
The fortunate part of this exercise was that my buyers ended up not overpaying for their home. The unfortunate part of this exercise is that my buyers ended up without a place to live!
What a difference six months makes. I’m sure those same sellers’ agents would LOVE to get an offer from my clients, no matter how low.
The ball is in the proverbial other court.
Further into today’s article, there was this chestnut of a fact:
In 2005 and 2006, prices were reduced on nearly half of all homes listed in eastern Massachusetts from Jan. 1 through July 12, up from 41 percent during the same period in 2004, according to MLS Property Information Network, the primary database for realtor listings.
Whoa. In 2004, which was a very, very healthy time in real estate, 41% of all homes had their prices reduced. In 2005 & 2006, it was under 50%. Not a big difference! You would have thought differently, wouldn’t you?
… (A) house sits, on average, on the market 97 days, up from 85 days in 2004.
Also, not a very big difference.
Finally, these truism:
“It’s not a buyer’s market,” said one seller. “It’s a procrastinator’s market.”
Definitely. Time and again I hear from other agents that their buyer clients are sitting and waiting, and not putting in any offers, with the expectation that 1) more properties will be coming on the market; and, 2) prices will drop.
Complete article: To fight the glut, home sellers push their prices down – By Kimberly Blanton, The Boston Globe