“House prices could fall 25-30% from their 2006 peak and not bottom until 2010, with even bigger declines 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 S&P/Case-Shiller data, have fallen about 15% and I expect them to drop another 10% before bottoming out in the spring of 2009.” – Mark Zandi, Chief Economist at Moody’s Economy.com Source: Reuters News 26/06/08
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 better put it on the market now, rather than wait. next year. or even the year after.
I totally agree with people not selling their homes now. Really! You may think and ask, “Yes, how would you 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 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 is oversupply, the more dramatic it becomes, the lower the prices. So really in this scenario, I as a realtor will do well in the business whether house prices are high or low.
If the Long Island real estate market were to lose about 50% of the homes currently for sale (about 17,000 homes) that would improve and stabilize the price drop dramatically and again as a real estate agent I would be fine because that would even help supply and demand would increase (more buyers).
However, I really don’t like being in a position where I am working with someone (salesperson) who is frustrated and dissatisfied with the results of “market feedback”. Market commentary 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, that says one thing loud and clear: “The price is too high.” It may also signal that the house:
A. Is not photographed well.
B. Is outdated or needs updating in key areas of the house.
C. Is cluttered in the images (see A).
D. Not differentiated from other houses.
E. Not advertised fully or in high traffic areas (i.e. internet – not just MLS).
F. Lack of a real estate agent who properly handles the ad.
Now, of course, some of these items fall outside (to some degree) of the real estate agent’s overall responsibilities. Sellers must be prepared to do “their part” in order to increase the property’s selling capacity.
Market feedback may also tell you that the home has all “the goods” (i.e. move-in condition, updated, etc.), but the price is too high. How? Simple. No offers. Many viewings with no offers should tell an agent that the price is a bit too high and that 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 every agent will hear the market speak to them.
Owners working with realtors like to focus on “a lack of marketing” by their respective realtors. And I will certainly say that in some cases they are right. But most of the time, especially in this market, it has little to do with marketing the property. Why would I say that?
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 it’s food on their table is probably a good idea. But here’s a tip for potential sellers – use google.com. Research the names of the agents you are interviewing. See how involved they are in the field. If they’re not involved… chances are they’re nothing in the business. Selling real estate is a business. It’s not who’s the nicest person (although that goes a long way) or who has a great recipe for chocolate chip cookies (although they’re very delicious). It’s about who is selling real estate. Who is part of the 7% of agents who do 93% of the activity? See Teammusso.
Now, with interest rates rising, buyers may want to get out and play or they risk being shut out of the market for years to come. I’ve written about the effects of higher interest rates on monthly payments and total interest paid on a mortgage. The effects are striking.
Now, more than ever, it’s wise for any buyer to consider working with a buying agent like me. Why pay 3% of the money you bring to the closing to an agent who works for the seller? That does not make any sense. I specialize in buyer representation. It’s one of the reasons I use state-of-the-art technology to help my buyer clients realize their dream of home ownership.
I look forward to doing business with you!
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