For sellers:
“Home prices may fall 25 to 30 percent from their peak in 2006 and not bottom out until 2010, with even bigger declines in subprime mortgage debt markets.” – Peter Acciavatti, credit analyst and CEO of JP Morgan Securities Inc Source: Reuters 6/11/08
“Home prices, according to S&P/Case-Shiller data, are down about 15 percent and I expect them to drop another 10 percent before hitting 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 really need to sell, you’re better off putting it on the market now, rather than waiting until next year. or even the following year.
I am in favor of people not selling their houses now. In fact! You may think and ask, “Yeah sure, how would I make money?” The truth is that people will always need to sell and there will always be people looking to buy. If fewer people put their houses 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 is an oversupply, the more dramatic it becomes, the more prices will drop. So really in that scenario, I as a real estate agent will do well in business whether the houses are priced high or low.
If the Long Island real estate market were to get rid of about 50% of the houses that are currently for sale (about 17,000 houses), this would dramatically improve and stabilize prices down and again as an estate agent roots, it would be good for me because this would help even 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 your actions. If their actions are to avoid your house and not see it, either by themselves or with another agent, it says one thing loud and clear: “The price is too high.” You can also point to the fact that the household:
A. It is not well photographed.
B. Is out of date or needs updates in key areas of the home.
C. It is messy in the pictures (see A).
D. It is not different from other dwellings.
E. Does not advertise completely or in high traffic areas (ie Internet, and not just MLS).
F. You lack a real estate agent who properly manages the listing.
Now, of course, some of these items are outside of the real estate agent’s general responsibilities (up to a point). Sellers must be willing to do “their part” to increase the property’s ability to sell.
Market feedback may also tell you that the house has all the “goods” (ie, move-in condition, updated, etc.), but the price is too high. How is that? Easy. There are no offers. Many no-bid showings should tell an agent that the price is too high and that only a slight price adjustment and remarketing of the property is needed to bring buyers to the table. Now I highlight the word “should” because it is not a foregone conclusion that all agents will listen to the market talking to them.
Homeowners who work with realtors like to focus on the “lack of marketing” of their respective realtors. And I will definitely say that, in some cases, they are right. But most of the time, especially in this market, it has little or nothing 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 therefore has a vested interest in selling your house because you have food on your table is probably a good idea. But here’s a tip for potential sellers: use google.com. Find the name of the agents you are interviewing. See how involved they are in the field. If they’re not involved…they’re probably not an entity in the business. Selling real estate is a business. It’s not about who’s the nicest person (although that goes a long way) or who has a good chocolate chip cookie recipe (although they are very good). It’s about who sells real estate. Who is he apart from the 7% of agents who do 93% of the business? See Teammusso.
For buyers:
Now, with interest rates rising, buyers may want to get out and play or risk being left out of the market for years to come. I wrote about the effects of higher interest rates on monthly payments and the total interest paid on a mortgage. The effects are starting.
Now, more than ever, it is advisable for any buyer to consider working with a buyers agent like me. Why pay 3% of the money you bring to the 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 state-of-the-art technology to help my buyer clients achieve the dream of homeownership.
I look forward to doing business with you!