“Home prices may fall 25 percent to 30 percent from their peak in 2006 and not hit bottom until 2010, with greater drops still in subprime mortgage debt markets.” – Peter Acciavatti, credit analyst and managing director at JP Morgan Securities Inc Source: Reuters 6/11/08
“Home prices, based on the S&P/Case-Shiller data, have fallen about 15 percent and I am expecting them to drop another 10 percent before reaching a trough in the spring of 2009.” – Mark Zandi, chief economist at Moody’s Economy.com Source: Reuters News 6/26/08
What these two quotes tell me about the Long Island real estate market is that if you’re in a position where you’re really going to need to sell, you’d better get it on the market now, rather than wait until next year or even the year after.
I am all for people not selling their homes now. Really! You may think and ask, “Yeah right, how would you make money?”. The truth is people will always need to sell and their will always be people looking to buy. If less people put their homes on the market, that would be a good thing – but only in large numbers. Supply and Demand dictate the pace of the market. When there’s an over supply, the more dramatic it gets, the more prices will come down. So, really in that scenario, I, as a real estate agent, will do well in the business, whether the homes are priced high or low.
If the Long Island real estate market shed about 50% of the houses currently for sale (about 17,000 homes), this would drastically improve and stabilize declining prices and, again, as a real estate agent, I would fair well because this would help even out supply and demand would increase (more buyers).
However, I really don’t like being in a position where I’m working with someone (seller) who is frustrated and dissatisfied with the results of “market feedback”. Market feedback is what buyers tell you, simply by their actions. If their actions are to avoid your home and not see it, either by themselves or with another agent, this says one thing loud and clear, “The price is too high.” It may also signal the fact that the home:
A. Is not photographed well.
B. Is outdated or in need of updates in key areas of home.
C. Is cluttered in the pictures (see A).
D. Is not differentiated from other homes.
E. Is not advertised fully or in high traffic areas (i.e. internet – and not just MLS).
F. Lacks a real estate agent managing the listing correctly.
Now, of course, some of these items are outside the real estate agent’s overall responsibilities (to an extent). Sellers must be willing to do “their share” in order to increase the sale-ability of the property.
Market feedback can also tell you the home has all “the goods” (i.e. move-in condition, updated, etc), but priced too high. How so? Simple. No offers. A lot of showings with no offers should tell an agent that the price is a bit too high and only a slight price adjustment and remarketing of the property is needed to get buyers to the table. Now I highlight the word “should” because it’s not a foregone conclusion that every agent will hear the market talking to them.
Homeowners working with real estate agents like to focus in on “a lack of marketing” by their respective real estate agents. And I will definitely say, that in some cases, they are right. But more times than not, especially in this market, it has little, if anything, to do with the marketing of the property. Why would I say this?
There are approximately 34,000 homes for sale in Queens, Suffolk, and Nassau Counties.
Now hiring an agent who works full-time and thus – has a vested interest in selling your home because it’s food on their table – is probably a good idea. But here’s a tip for prospective sellers – use google.com. Search the name of agents you’re interviewing. See how involved they are in the field. If they’re not involved…chances are they’re a nonentity in the business. The selling of real estate is a business. It’s not who’s the nicest person (although that goes a long way) or who has a good recipe for chocolate chip cookies (although they’re very yummy). It’s about who sells real estate. Who is apart of the 7% of agents that make 93% of the business? See Teammusso.
Now with the interest rates rising, buyers may want to actually come out and play or they risk being priced out of the market for years to come. I wrote about the effects of higher interest rates on monthly payments and total interest paid on a mortgage. The effects are startling.
Now, more than ever, it is wise for any buyer to consider working with a Buyers Agent like myself. Why pay 3% of the money you bring to closing to an agent who works for the seller? That makes no sense. I specialize in Buyer Representation. It’s one of the reasons I use cutting-edge technology to help my buyer clients achieve the dream of homeownership.
I look forward to doing business with you!