My Long Beach Home Won't Sell-Are YOU Chasing the Market Down?
18 comments » 
Are YOU ˜Chasing the Market Down?
So many Long Beach properties are sitting on the market, no showings, no offers. They were priced at or near market at the time of the listing. Do you know what the current market price of your Long Beach Home is? Or are you ˜chasing the market down?
When you listed your property a CMA (comparable market analysis) was presented to you. Fair market value was established and your price was determined. You priced it at market knowing that market prices have been declining. Several months have passed, you have not reduced your price, do you know what the market price of your Long Beach Home is today?
Let me explain what ˜Chasing the Market Down is.
You priced your home at $650,000 on February 1st, which was market value then.
Between then and April 1st (60 days on market) several homes in your area sell, your market price drops to about $625,000. You do not realize the impact this has on you and are still convinced your property is worth $650k. Your agent has mentioned a price reduction, you have resisted. You really believe your home is worth $650k, after all, it was worth over $700k last summer.
On April 15 you agree to reduce your price to $635k, which seems like a considerable reduction, after all $15k is a lot of money when it is coming out of your pocket. But is it? You are now priced at $635k and the market value is $625k.
You sit for another month, no showings, no offers, what the heck is that agent doing to sell my home? Your agent has mentioned several times that another price reduction is in order, but you JUST reduced it $15k what the heck is going on here?
You finally agree to reduce your price to $625k on May 1st, but another month has gone by since market price was established at $625k. Has your agent showed you the CURRENT market prices? Are you aware that the market dropped another $10k in that month? Market is now $615k and here you are again sitting over market at $625k.
You and your agent go through this dance for several more months until your listing contract finally expires. Market price is now $610k, you are still priced at $625k.
If you had reduced your price on April 1st to $620k or $625k, your property probably would have sold. Instead here you are, 6 months later, no sale and market value is $610k.
You just lost a lot of money.
The scenario I just described is so common it is really sad. This is what is going on in our market. Sellers who are slow to adjust their price to the current market end up losing a lot of money on the sale of their home.
Last summer I watched sellers who did not want to believe, list their homes for what they believed they were worth and ride the market down through 2 listing contracts and still not sell. Some of these sellers lost around $100k in sale price.
The Long Beach real estate market is flooded with properties right now. More inventory than we will be able to sell. There are buyers out looking, but not as many as were anticipated and they are all looking for a deal. Many properties are just not going to sell.
If you ˜need to sell, be smart. Price your home below market value. Offer value! Value is what is selling right now.
˜Chasing the market down is a seriously bad gamble, please do not fall victim to it. This is not the market to speculate in. If you do not need to sell, this is the wrong time for you to be on the market.
If you are in trouble, seek advice from a professional financial advisor. Do not wait until it is too late.
From: Inman News - Tuesday, June 19, 2007 (see article for full details)
California and Florida are expected to dominate a list of areas where a private mortgage insurer expects home prices are the most likely to decline in the next two years.
The markets with the greatest risk of decline share a history of price volatility rapidly rising rates of price appreciation above the long-term average, followed by a recent sharp slowdown in the rate of appreciation, said Mark Milner, PMI Mortgage Insurances chief risk officer.
PMI reports that affordability remains ˜extremely challenged in California after a prolonged period of rapid price appreciation. Current low levels of unemployment continue to support Californias housing market, PMI concluded, but weakening housing demand and prices have resulted in high risk scores.
The 15 MSAs with a greater than 50 percent chance of price declines were:
- Riverside-San Bernardino-Ontario, Calif. (652)
- Phoenix-Mesa-Scottsdale, Ariz. (646)
- Las Vegas-Paradise, Nev. (614)
- West Palm Beach-Boca Raton-Boynton Beach, Fla. (607)
- Los Angeles-Long Beach-Glendale, Calif. (586)
- Santa Ana-Anaheim-Irvine, Calif. (577)
- Oakland-Fremont-Hayward, Calif. (572)
- Orlando-Kissimmee, Fla. (563)
- Sacramento-Arden-Arcade-Roseville, Calif. (560)
- San Diego-Carlsbad-San Marcos, Calif. (555)
- Ft. Lauderdale-Pompano Beach-Deerfield Beach, Fla. (542)
- Miami-Miami Beach-Kendall, Fla. (524)
- Tampa-St. Petersburg-Clearwater, Fla. (506)
- Boston-Quincy, Mass. (501)
- Washington D.C.-Arlington-Alexandria, Va. (500)
Also Read: Chasing the Market Down - Are You Guilty?
| Laurie MannyLong Beach Realtor (562) 212-5420 |
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Main Street Realtors Belmont Heights 244 Redondo Avenue Long Beach California 90803 |
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· http://floridahouseinfo.comPlaying Chase the Market is a counter productive way to sell a home. Often it is a result of seller resistance, and against a Realtors advise. Once priced too high, buyers resistance will prevent a successful sale.
However, for those who have purchased homes in less than 4 years, what is occuring is a similar to the law of diminishing return. The ability to sustain equity, is diminishing.
Buyers have a large inventory from which they may chose. They will seek out the best price and value to meet their needs. This does not always work for sellers, especially those who purchased when prices were rising.
Short time turn overs are not going to yield the prices many speculators thought. If a seller does not have to sell, then perhaps waiting is the best option. If a seller does have to sell, he likely will not get the price he thought he would.
Permalink June 24, 2007 07:39:52 · http://www.maggiesellsmiami.comLaurie, you explained this beautifully. It is so important that a seller understand this process. It's vital! When I give someone the price I think a home should list for, it isn't because I don't think they deserve the extra $65K, it's because I want them to sell and sell in good time before the prices drop again. I wish more of them would listen. Your post may help in that regard!
Permalink June 24, 2007 08:07:08 · http://MissyCaulk.comLaurie, I really really appreciate this post. It is so TRUE ! I have said it but seeing it in writing makes is so much better.
Permalink June 24, 2007 08:14:00 · http://focusonfrederick.comUnfortunately some sellers just don't hear us talking...We give them nice professional opinions about their property and the market...they balk at the commission, but they don't pay that unless it sells. Some folks are just stubborn.
Permalink June 24, 2007 08:49:27 · http://www.ParadiseReport.comLaurie -- You are a master at explaining things so beautifully! Thanks so much for sharing!
Permalink June 24, 2007 08:54:51 · http://www.manatulberg.comThis makes so much sense. I hope your Long Beach readers take advantage of the insight you have provided.
Permalink June 24, 2007 11:56:41 · http://www.longbeachrealestatehome.comPermalink June 24, 2007 13:11:05 · http://www.longbeachrealestatehome.comI always fell terrible when a seller doesn't understand the damage they will do to themselves by over-pricing for today's market. Recently I have turned down close to 20 listings due to overpricing, there really was no point in listing them anywhere near the price the seller wanted. The price was just too high, the sellers never would have come down to what the market will bear and the properties would never appraise for the prices.
Permalink June 24, 2007 13:14:20 · http://www.longbeachrealestatehome.comPermalink June 24, 2007 13:15:42 · http://www.longbeachrealestatehome.comPermalink June 24, 2007 13:17:58 · http://www.longbeachrealestatehome.comPermalink June 24, 2007 13:18:37 · http://www.longbeachrealestatehome.comPermalink June 24, 2007 13:19:38 · http://www.Irina4RealEstate.comLaurie, great articles... sellers listen to the experts!!! I couldn't agree with you more. In today's market, both agents and sellers need to very closely monitor the trend in their area, new listings and run new comps every 10 days or so. Pricing property correctly is critical.
In my opinion, you can never underprice a property, the market will auto adjust the price via multiple offers. Overpricing doesn't work in a strong seller's market, and is a sign of death in a changing market.
Permalink June 26, 2007 00:09:44 · http://beachcityrealestateinfo.blogspot.comIt would be so much easier if Sellers got this at the beginning..I just had this conversation with a client who thinks his property is worth more then it is.. I can think of at least 25 homes in MB that need to make the market not chase it..
Permalink June 26, 2007 02:45:32 · http://www.longbeachrealestatehome.comThank you. Selling property is no longer possible in todays market, unless it is priced properly. And yes, the comps must be checked regularly. I agree that it is smart to underprice a property, however, the agent needs to know how to market the property to bring in the offers and to get that price bid upwards. I agree, overpricing is a death sentence in todays market.
Permalink June 26, 2007 02:49:35 · http://www.longbeachrealestatehome.comHi there beach gurl. You are so right. It is very difficult to get through to a seller prior to going on the market. I always try to put myself in their shoes. Imagine a Realtor telling you to undervalue your beautiful home on the market. Imagine the level of trust a seller who actually does that places in their Realtor. It is very difficult for them to see the value in it and our job to show it to them, not always an easy task.
Permalink June 26, 2007 02:53:14 · http://www.delawareohrealestate.comI love this post! Take out Long Beach and adjust the dollar values and you have a post that could talk to consumers in virtually every market.
It is still a challenge.
The good news: I have had three people argue with me in the last two weeks that my suggested price was too HIGH for their home. I explained to them how I come to my number and said I'd be happy to list their house for that price and sell it quickly.
So, hopefully the sellers are starting to see the light!
Permalink June 26, 2007 10:51:11 · http://www.longbeachrealestatehome.comThank you. While I wrote this article for Long Beach, you are absolutely right, this is relevant for consumers in all markets. I love your comment about having had 3 sellers argue with you that your price is too high! They sound like serious sellers who have been doing their homework and are really understanding what is going on in the current market, really need to sell and don't want to botch it up. Maybe we should have them write articles to other sellers, so that they can all see the light.
Permalink June 26, 2007 11:14:04This post has no comments awaiting moderation.
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