Oversupply Continues to Drive Sale Prices Down
Amy July 27th, 2008
Another article about the over supply of homes, this time focusing on new construction, suggests that the bottom is not here yet. A Wachovia economist suggests that the housing market will not hit bottom until mid 2009 to mid 2010. While I agree no one has a crystal ball, mid 2009 is over a year from today, and next summer or the summer after may be the bottom. What that means to the home SELLER, SELL NOW! If you don’t want to lower your price today to get your home sold because you want more equity, next year will likely give you even less or bringing money to the closing table. Which is worse, less money this year, or having to pay money next summer or the summer after?
From the MSNBC Article: http://www.msnbc.msn.com/id/25821231/
No sign yet of a bottom in home prices
Rising foreclosures, big new-home inventory push recovery into next year
by Paul Sakuma / AP file
When will home prices stop falling?
The answer is critical to millions of American homeowners who are watching their home equity melt away or are unable to move because falling values have sent potential buyers to the sidelines. Even if you don’t own a home, the question is central to your chance of getting a good night’s sleep if you’re worried about your job, your bank account or the investment in your 401(k).
In the latest evidence that prices are still sliding, the National Association of Realtors reported Thursday that the median price of existing homes sold in June fell to $215,000, down 6.1 percent from a year ago. Sales fell 2.6 percent from the month before — far more than analysts had expected.
Richard Gaylord, president of the Realtors, said a recent survey found that nearly one-quarter of potential home buyers are “waiting on the sidelines.” A major housing package passed by the House Wednesday after months of debate could help boost the market by offering a credit to first-time home buyers, the group said.
The Wachovia economist further suggests that the nationwide priced drop will go from last years decrease of 6.1%, to falling an average of between 22 and 29 percent. So, we have a while to go. Now is the time to sell if you are going to sell, and not a good time to have unrealistic pricing expectations. The market is stressed today July 27th, 2008, but who knows what will happen in a month, will rates go up even 1% it will take buyers out of the market, and if prices continue to slide down as they are expected to do, your home will be worth less.
Another economist quoted in this article suggests that “Bottom line, we probably have a year or more to grow into a better balance in the housing market,” meaning until prices come into alignment from when housing prices peaked in 2006.
Yet another Merill Lynch economist estimates that excess inventory of new homes and condos is nearly 30 percent higher than historical levels.
My professional recommendation for the outlook on selling housing in Cincinnati is this: If you don’t have to sell, don’t sell until prices have stopped decreasing. If you have to sell, do it now and get it sold quickly, listen to an experienced Realtor’s pricing suggestions. Pricing comparables need to be recent (less than 90 days ago) and take into consideration your competition. Always hire a Realtor that knows the area and sells more than 10 homes a year! An experienced and practiced Realtor who knows the area will be the best thing for any seller. With the time it takes to sell a home these days, be sure that that Realtor has individual time for pricing and preparing your sale. Someone with 30 or 60 listings does not have time for your individual needs! If you can, interview more than 1 Realtor to see the differences in knowledge in pricing and aggression in marketing.
Call or email Amy Broghamer if you find you need to sell, 513-377-3637. In this year’s Hyde Park area market, I am selling homes in an average of 35 days and selling at an average of 97% list price, I sell more than 30 homes a year and am in the top 2% of Cincinnati Realtors. I only carry 15 listings at a time or less, all price ranges, for motivated sellers. Let me know if you would like a private consultation!
With rising gas prices and longer hours at the office, people who moved outside of 275 are migrating back inside the loop! I have seen this several times in the last year with a few young families. I am also seeing homes outside of this 275 loop taking more than twice as long to sell on average and they are getting far less than the usual 95% list to sale that we are seeing inside the loop in areas like Hyde Park, Mt. Lookout and Oakley. Buyers, consider the warnings in this article from the Herald Tribune on the results of moving further outside the city. Keep in mind the article was originally published June 24, since then gas prices have risen even more! If you have any specific questions about values and time on the market inside or outside of the 275 loop, please give me a call at 513-377-3637.