I seem to remember something about how accurately pricing your home is important if you want to sell it?
From yesterday’s Times:
When Brandt and Tiffany Schneider put their brick colonial on the market for $1.2 million last April, they had every reason to be optimistic. The home, three years old and in a suburban neighborhood here, features a two-story great room with a stone fireplace and a leafy backyard …
A year later, they are renting a house in Madison, Wis., where they moved to be closer to family, and are still waiting for a buyer for their old home …
Half a dozen price cuts haven’t done much to generate more traffic … and the Schneiders are now asking $874,900. At that price, they would just about recoup what they originally spent buying and upgrading the house.
“We’re hanging on by the skin of our teeth,” says Mrs. Schneider, 41, a stay-at-home mom with three children. At one point, the family held a garage sale to raise some extra money. “We put a lot of cash down, we didn’t take out a subprime loan. But we never thought we’d have a hard time selling a great home in a wonderful neighborhood.”
I think you see the ridiculousness of the situation. In a market that is flat, at best, in pockets of the country, while suffering in others, to think you could buy a home in
2004 2005 for $875,000 then flip it just three two years later for $1.2 million (37% more), is impractical. Silly, even. Meanwhile, the wife says they put down a lot at closing – so they could theoretically lower the price even more. They are currently pyaing the mortgage there and the rent on their new home, so they are losing money every month, anyway.
The article doesn’t discuss the specifics of the situation, which means it is easy to shoot arrows. It appears that the family voluntarily decided to move – “to be closer to family”. That’s nice. But they can’t be surprised, then. The part about holding a bake sale is … I don’t know what.
Still, it sounds as if it’s a nice home. A reader of this blog found the home on Zillow – 7511 Forest Creek Ridge Ct, Summerfield, North Carolina.
Zillow estimates can’t be trusted, but it looks as if the family has always had unrealistic expectations. They bought the home for $801,500 in 2005. It has never been valued at what they asked, during the time since then. (During the past 30 days, Zillow estimates its value is down $23,000!)
I have to say, once again, I don’t understand the media. It doesn’t make any sense to pick examples that invalidate the point of a story.
Source: The Trouble in Housing Trickles Up – By Nelson D Schwartz, The New York Times