From May 7, 2007.
I finally reached my limit yesterday. I have been spending weekends attending to the needs of buyers and assisting my growing group of clients attempting to sell their home. It may sound impossible, but I think it is likely, we can not see the forest for the trees.
Let’s face it, the market is still sluggish. (note: sluggish is fancy real estate technical term for the fact that activity is maybe 80% of where we “thought” it would be)
I read the headlines. I watch the nightly news. I read trade publications. I have become proficient in an entirely new vocabulary. “The market has changed.”” The market has died.””The bubble has burst.””The sky is falling.” O.K., maybe not the last one.
It has been heralded that we are in a “buyer’s market”. Really? Call me crazy, but my assumption would be that a “buyer’s market” would have ready, willing and able BUYERS.
If those buyers were out there, wouldn’t they be buying?
I had to see for myself. I pulled up 15 listings in a price range comparable to what I would list my home for and went out to view homes like a buyer. I made the necessary calls. I went through all the steps that I normally follow for my clients.
Our first stop was Normandy Farm for brunch. It is the easiest $26 to spend on a Sunday morning. The food is wonderful, the service top notch and the experience makes you want to make it at least a monthly event.
Everyone looking for a home should hit the market on a full stomach feeling like a special person. Normandy Farm will take care of that part of the mission.
Then my partner and I began. The first house was being held open by the listing agent. Out of the 15 we visited, 6 were being held open. I am sure that the first agent had a lot to share, but we could not hear her over the traffic that roared by outside. It seemed to me that she should keep that front door closed. The flier pointed out the wonderful location. I asked why the price was the same for over 4 months and the agent just shrugged her shoulders and told me….“two years ago there would have been a line out the front door, contract in hand to buy this house.” As we were leaving, I mentioned “This is 2007 and we aren’t in Kansas anymore.”
I won’t bore you with a blow by blow description of the day. It did take 6 hours to visit all 15 homes. It was very tiring. When showing homes to clients, you keep a practiced eye on the structure of the home, how it is presented, etc. Your main focus is on your client. (I may have mentioned this – I have a home. When working, my client is buying the home. The advice and counsel are mine. The decision is theirs.)
Anyway, since the final decision rests with the owner of the home, I have something to say. You all need to rethink pricing. If you are sitting there month after month and your house is still on the market, IT IS PRICED TOO HIGH! I really don’t care what the neighbor sold their home for last year. It really doesn’t matter what you paid for your home. Your indebtedness has not relation to the market value of your home.
The media is running out of ways to explain the market. The “correction”,”bubble bursting”, “change in mortgage guidelines”, “impact of gasoline cost”,”buyer on the sidelines”, “paralysis by analysis” and every other thought is sugar coating the bottom line.
There is only one word that neatly describes the reason for the current market. There is only one label that covers the main reason houses are sitting unsold. It has nothing to do with the mortgage industry. It has nothing to do with the willingness of buyers to make offers. It is not meant to blame anyone. It just describes in total, the underlying issue.
That’s right, plain old fashioned GREED. We have the proverbial stand-off at the highest level. And the level is so high, no one is bothering to challange the sellers. Buyers see the house on-line, see the price of the house and do not bother to even drive over and walk through the door. They don’t ask their agent to make an appointment. They just sit at home an wait. They are not even going to initiate a search until sellers realize that the gains of two years ago are gone.
You are not going to sell your home for more than the neighbor sold theirs. It is not going to happen. If you truly want to sell your home, price it like you want to sell it.
Of course, our trip yesterday took us from the Bethesda area to Derwood. The first house and the last house and every house in between was priced higher than it should have been priced. We don’t have to rush back, we know they will be there next week and next month. The agent may change – sellers often like to use the agent as a scape goat when the house won’t sell for the price they want. I imagine it is very difficult to accept that your home is not worth what you believe it to be worth. If you have the chance, try to remember the little voice in your head that whispers “what are they thinking?”.
I know it will not sell headlines or keep folks riveted to the nightly news, but, the headline should be –
HOUSES LINGER LONGER WHILE OWNERS LANGUISH IN GREED ! ! !
I do feel much better. I was beginning to worry that there was a horrible reason that the housing market is sluggish. At least we can be comforted. GREED has been around a long time. We know how it will end.
The greedy owners will sit back and wait. They will fire their agent. They will contemplate for-sale-by-owner. They will continue to believe that their situation is different. They are not asking too much. Then time will become a factor and the price will come crashing down. They will sell for less than they could have received in the beginning. Prices will come down. The market will pick up and we shall have survived yet another cycle in our economy.
My partner and I will now just sit and wait. We learned two valuable lessons. One, the couple homes we did like will not be sold at the price they are asking. When they come down, the owners will be weakened by the experience and we will be able to negotiate strongly for every term we want. Two, when we put our home on the market, it will sell within a month. Homes priced correctly move quickly.
GREED is such an ugly word. Maybe that is why the market seems so….well, ugly.