What's the housing market going to do?

[Texas Proud]

Also with house prices falling, land prices are too. New houses built on less expensive lots are now cheaper than older, in some places. Tougher competition with new and distressed properties.

Edit: also this is what I've heard, but don't take my word for it, that the average time to buy a house is one week and if a house hasn't sold in one month it is priced too high.

If you go now on some real estate broker sites advising buyers on which houses to look at, you see it says look only at motivated sellers. Looking at a an overpriced house is a waste of everybody's time because even if an offer is made the seller won't take it. And I have one anecdote, for what it's worth, where a seller did just this to my parents, and months later dropped the price $50,000. Here's one such site:
Make An Offer On An Overpriced Home

I just can not believe that the average time to buy a house is one week... heck, it took me over 1 year to find what I wanted at the right price... We had a LOT of people who just did not believe that there was not a crisis in our area... heck, the house that I bought was listed at $190K at first... I did not even want to take a look at it since it was above what I was willing to pay... one year later made and offer for $160K and bought it...

I still take a look online to see what is happening.. in my zip code there are a few HUNDRED houses that are listed with 'price reduction' on them... people still list them way to high and wonder why they do not sell... in our area there is a ONE YEAR supply of houses even if no new ones came on the market...

If you want to sell, you need to get the price down for the few buyers that are out there... live with the loss...

 

[Katsmeow]

If you want to sell, you need to get the price down for the few buyers that are out there... live with the loss...

This is exactly why I feel so frustrated. We believed this going in and were insistent we wanted to sell quick, not be overpriced, etc. But we did ultimately follow what the real estate agent suggested (there weren't a lot of comps but the amount suggested seemed reasonable based on them).

In retrospect it is easy to say our price was too high but at the time we thought we were pricing on the low end. We will be relisting probably in March.

 

[Texas Proud]

This is exactly why I feel so frustrated. We believed this going in and were insistent we wanted to sell quick, not be overpriced, etc. But we did ultimately follow what the real estate agent suggested (there weren't a lot of comps but the amount suggested seemed reasonable based on them).

In retrospect it is easy to say our price was too high but at the time we thought we were pricing on the low end. We will be relisting probably in March.

I think your RE agent did you a disservice... a BIL of mine father sold his house about a year ago... the RE agent said 'you need to do X,Y and Z to get the price up'.... he said "I am selling as is..."... the RE agent said 'you will only get this price'.... he said 'great'... he put it on the market at the low end the agent suggested and sold within one week.... and it was not a low end house... the buyers saw the value in the house and the low price...

It is trying to get those last few thousand $$$s that cost... and agents are not that great at seeing the decline... they look at what has sold and come up with a price... but the market might have already turned and you are left out in the cold... I remember seeing one of the house shows that this happened... they priced a condo unit at X... which was competitive to what had been sold.... nothing happened.. they reduced price.. nothing happened... they reduced again... at the end of the show the agent took the person to another unit that was better and priced cheaper than hers... the lady was mad... the agent said 'it was priced right at the time'.....

To me, if you want to sell... you have to reduce the price if you are not getting much traffic... and reduce again until you start to get offers... if you do not, then you are just hoping that the house is a perfect fit for someone who is willing to 'pay up' to get your house....

 

[DeborahB]

This is exactly why I feel so frustrated. We believed this going in and were insistent we wanted to sell quick, not be overpriced, etc. But we did ultimately follow what the real estate agent suggested (there weren't a lot of comps but the amount suggested seemed reasonable based on them).

In retrospect it is easy to say our price was too high but at the time we thought we were pricing on the low end. We will be relisting probably in March.

We are in the process of getting some minimal work done on the house so it shows better. It is already priced low for the neighborhood and the amount of space.

I think it's just going to take a while. Hoping that a new carpet, paint, and so on will help. We could spend $20K renovating it, but I don't think we'd get enough to justify the money.

We took it off the market to do the work - will relist in mid-Feb or March.

 

[Katsmeow]

To me, if you want to sell... you have to reduce the price if you are not getting much traffic... and reduce again until you start to get offers... if you do not, then you are just hoping that the house is a perfect fit for someone who is willing to 'pay up' to get your house....

We did $30k worth of work getting house ready to sell. It looked great.

We actually got what the agent felt was very good traffic part of why she didn't feel it was overpriced. We did reduce the price twice == at my insistence.

I think that when we relist though we are getting a new agent. I realize she was guessing somewhat on price given the comps but I realize that now. At the time she seemed certain.

 

[tryan]

Yeah, LAST thing you want to do is chase the market DOWN.

Get ahead of the decline and it'll sell.

 

[Buckeye]

The best thing we did prior to putting our home on the market was to have a professional appraisal done. We didn't like the number the appraiser came up with but it told us the true state of the local market and it made us feel like we knew the "real" price. Of course, the "real" price is the price someone will pay...

Because we were in a hurry to sell, we sold under the appraisal but at least we knew the buyer would have no issue getting an appraisal that would support their loan.

 

[Dimsumkid]

This market is very frustrating. I've had my house on the market starting in July and changed RE agents in October. Price started at 409k, I never made any demands, took what prices the agents suggested, and have dropped each time a re revaluation was made, usu. 10k at a time, now down to 379k. Was just told that buyers are looking at shorts and foreclosures first, then homes like mine w/no financial issues. I was told my house is overpriced, even though I never set the price! Makes me scratch my head as the price suggested to drop to is 340 - 350s, but that may be too high. Was given an example of a comp short sale, started at 425k, renovated everything AND dropped the price to 306k! How can you compete with that? We tried a short 6 month rental, but now will consider longer term renting instead. RE agent is frustrated, said it doesn't make sense in this current market, she didn't think it was worth dropping another 20-30k. The soon to be rush of foreclosures the banks are holding has my agent thinking of these options now instead of waiting.

UPDATE: We got a call on a showing last night. The same group wants to do a long term rental, possibly 2-3 years. I guess I can't complain, I'd rather sell it, but I'm not going to turn down $1800/mo rent either!

 

[Buckeye]

Do you really want to lock yourself in for more than a year? Things change. Or what if the tenants are just jerks who call you daily about things they think is wrong with the house? Do you want to go through that for 3 years?

Do a 12-month lease and then go month-to-month. Don't increase the rent for the next few years after the lease expires if your goal is to keep the tenants and you think a rent increase will chase them away.

If a tenant is going to leave, they are not going to let a lease stop them but if your costs increase dramatically or someone walks up and wants to buy your home at a great price, you don't want to be looking at 2 more years of a lease you can't get out of. It's much easier for a tenant to get out of a lease ("so sue me") than it is for a landlord to terminate a lease since you have no legal way to remove the tenants from the house while the lease is in force.

 

[Dimsumkid]

Do you really want to lock yourself in for more than a year? Things change. Or what if the tenants are just jerks who call you daily about things they think is wrong with the house? Do you want to go through that for 3 years?

Do a 12-month lease and then go month-to-month. Don't increase the rent for the next few years after the lease expires if your goal is to keep the tenants and you think a rent increase will chase them away.

If a tenant is going to leave, they are not going to let a lease stop them but if your costs increase dramatically or someone walks up and wants to buy your home at a great price, you don't want to be looking at 2 more years of a lease you can't get out of. It's much easier for a tenant to get out of a lease ("so sue me") than it is for a landlord to terminate a lease since you have no legal way to remove the tenants from the house while the lease is in force.

Sorry, this is what I just found out in the last hour, the renter wants a long term 2-3 years, I'll know more when my agent sends over the paperwork and does the credit check. I think after 1 year, I'll know how it's working out and then extend 1 yr or even 6 months at a time depending on how the RE market is doing. If they're great tenants, then I'd have no problem after the 1st year of renting it out to them. This will be my 1st time being a landlord, so it'll be a new experience for me too. I can handle most fixup issues myself. having renovated 2 homes already for sale purposes. Believe me, I'm well aware of having to evict someone and the headaches that go with it. I had to do this with a sibling who was freeloading of my mother.

 

[Dimsumkid]

Sorry, this is what I just found out in the last hour, the renter wants a long term 2-3 years, I'll know more when my agent sends over the paperwork and does the credit check. I think after 1 year, I'll know how it's working out and then extend 1 yr or even 6 months at a time depending on how the RE market is doing. If they're great tenants, then I'd have no problem after the 1st year of renting it out to them. This will be my 1st time being a landlord, so it'll be a new experience for me too. I can handle most fixup issues myself. having renovated 2 homes already for sale purposes. Believe me, I'm well aware of having to evict someone and the headaches that go with it. I had to do this with a sibling who was freeloading of my mother.

Since I changed my rental listing from short term to long term, I'm getting a burst of showing requests now. My agent said she's seeing an uptick in rental activity right now.

 

[DeborahB]

You are probably right. I was projecting. I want a cheap house that isn't fixed up so I can fix it up the way I want.

That's what I like, too - I always have fixed up cheap houses (relatively cheap, that is). Unfortunately there don't seem to be as many buyers out there with those skills.

We're having some work done - not major yet, but enough to make it more move-in condition and fresh paint... Major would be ripping out the kitchen and one of the bathrooms and replacing them. The problem is, it's still not going to sell for much (if any) more. It could easily cost $20K to do this, even at the cheap end.

It might sell quicker but we'd have to general contract the whole thing (or at least keep an eye on it...) ugh.

 

[DeborahB]

In answer to someone's point - my SO's mother paid ~$50K for the house 30 years ago. We listed it at $100K. The prices in that area are depressed. We'd prefer not to be landlords. It's just far enough to be a hassle. A few years ago it would have sold as is for $130K, based on comps.

We didn't think of having it formally appraised - that's a good idea.

Per the discussion about offering less than the asking price... We did that when we purchased our home. The elderly owner had either died or was in a nursing home, can't remember - anyhow her son was selling it. We bought at the peak of the market and still got it for less than asking price. We knew it needed a lot of cosmetic work, new floors in a couple of rooms, etc., new cooktop...

What didn't show up in the inspection was that the original owner's husband (dead 15 years) had been a heavy smoker. We got the unbelievably ugly wallpaper off the walls and had them painted. Yellow stains came through. They tried Kilz, all of that stuff. Nothing worked and it wasn't obvious until a few days after painting. Finally we had them paint pigmented shellac on the walls and that stopped it. You can even cover magic marker with pigmented shellac.

But - this made the paint job cost twice as much as anticipated, which was not wonderful. So the repairs went from $15K to $30K - and we fired the painters and ended up finishing the walls ourselves due to their general sloppiness.

Hindsight is 20/20... We wish we'd offered less but he was offended by our offer and made it clear he wasn't going any lower. We did get a discount for the cooktop that was broken, but nothing else. He thought it was in wonderful condition (can't figure out why!)

All along I've reassured myself that we could get much more for it than we paid - we've now done a lot of kitchen remodelling (yeah, granite countertops). Up until now, that is. Zillow is dropping its estimate to where we wouldn't get back our investment.

OTOH, we don't plan to move. We've been here 8 years.

 

[brucethebroker]

If you want to be "rid" of the house, you really have 2 options. Rent to buy, or sell it outright. The right price or the right terms always sell a house. A rent to buy, or a contract sale, with enough down to protect the seller, and a nice interest rate of, say, 5% should do the trick. There is alot of "mattress" money out there, and many people who cannot or do not want to get a conventional loan.

As far as pricing-forget Zillow. Have three real estate brokers, with at least 10 years experience in your area, do a market analysis on the home. Two of the three should be within 5% of each other. Use that price as a start. Every 30 days, drop the price 2-3% until sold. That is the way the banks and corporations do it with their homes. Eventually, it will sell.

Unless your real estate broker thinks the home qualifies for FHA financing, do not spend the money to fix it up. And, by the way, FHA is a real mess right now-the fed. govt. has put out a number of new regs and things are crazy. Stay away if possible.

 

[Dimsumkid]

Since I changed my rental listing from short term to long term, I'm getting a burst of showing requests now. My agent said she's seeing an uptick in rental activity right now.

My excitement of possibly renting this out went out the window. The people who applied just got foreclosed on and chapter 13, credit scores are lousy, 400-500 range, lots of credit card debts. Better off not renting, tomorrow is a for sale showing, maybe some luck with this one. My agent mentioned all her listings have been pretty dead recently, then we get 3-5" snowstorm and people want to see the listings during the storm!

 

[Sam]

Even Houston, TX is affected by this downturn. Not by a lot, but still.

I wonder how long it will be before we hear again from the people who were absolutely certain that real estate was the smartest LONG TERM investment? Where are they now?

 

[Meadbh]

Best of luck with the house sale!
Real estate is local.....and check out some of the addresses in NL!

Photos: What one Metro Vancouver home, priced at $1M, can get you in Newfoundland

 

[Texas Proud]

Even Houston, TX is affected by this downturn. Not by a lot, but still.

I wonder how long it will be before we hear again from the people who were absolutely certain that real estate was the smartest LONG TERM investment? Where are they now?

Sam... I am in Houston and I think it has affected us a lot... not a little...

I sold my house for about 15% less than it would have sold a couple of years ago... I bought the house I am in now for about 12% less...


Take a look at the listing at Har.com and click on the 'reduced price' in your zip.... I bet there are hundreds of houses that show up... true, so of these people were in la la land to begin with, thinking their house was worth a whole lot more than it is.... but still...