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Archive for June, 2009

Recovering Real Estate Market?

Friday, June 19th, 2009

The topic of the economy and the real estate market seems to be on everyone’s minds.  Have we hit the bottom of the market yet?  When is the right time to buy to take advantage of what is going on?  These are some questions that I often hear.

There are some very positive signs that signify that our real estate fall here in the upstate is almost over.  In a recent article in a national financial magazine, the author names the Greenville / Upstate area as one of the areas that will show signs of recovery first, most likely as soon as the end of the 2nd quarter of 2009.  Another study, called the North American Cities of the Future, named Greenville as the top micro city in the US (email me if you would like the .pdf version of the study).  Positive press regarding our area with respect to near term and future success in economic and real estate sectors is gaining steam.

More specifically, when you look at sale activity for residential real estate over the last 3 months, you notice a distinctively positive trend.  And, even more specifically with regard to our business at Del-co Realty, we have noticed increases in contracts, closings, and call and website activity.  There appears to be a more positive mood in general.

Another item of note is the effect of the First Time Homebuyer Tax Credit of $8000.  Estimates are that around 2000 first-time buyers (nationally) will take advantage of this tax credit by purchasing a home before December 1, 2009.  The overall impact of these buyers is much greater when you think about the fact that the sellers of the homes they buy in many cases buy another home as well, i.e. the domino effect.

The news is not all positive.  The automakers are still struggling to find traction.  There will be more changes to the lending and banking industry.  There are many businesses that will have significant layoffs in the next few months.  Many individuals are still struggling to pay their bills due to job losses and cutbacks.

So, what does all of this mean?  Our current situation is very unique, indeed.  If we are not at the bottom, we appear to be very close to it.  Now may be the perfect time to buy a home.  Prices will probably remain low until inventory levels equalize, due to increases in sales.  But, as the positive news gains more momentum and the market begins to increase, the bottom will be gone.  You’ll never be able to pinpoint exactly when we are bottom, because as you notice things improving, the bottom of the market is already behind you.

(Aaron Cole, the author of this information, is the creator of HomeSOLDin60TM, the simple six-step process that guarantees a home seller the best chance of getting the best price for his or her home in the shortest time.)

Posted in Buyers Journal | No Comments »

Should I Reduce My List Price?

Friday, June 19th, 2009

Should I reduce my price?


It depends.

 

You should always remember this:your price doesn’t matter if the buyer doesn’t like your home.  This is one of the most important “real estate truths” I have learned in the last few years.  And from what I have seen, many sellers and agents don’t understand this.

 

A price reduction might be the right thing to do depending on how you established your list price (and your expected sale price).

 

I have found the best way to establish a list price is to follow a three-step approach:

 

1)  Determine the value for your home that is historically justifiable based on previous comparable home sales and current pending home inventory – this number is your bottom line number (i.e. your contract sale price should be at this number or above)

2)  Add 3% to 5% to this historically justifiable number to give yourself some negotiating room

3)  Take the number arrived at in step #2 above and adjust it to reflect how buyers use price ranges to determine the homes that fit their search criteria 

 

 

It is important to note that in a market where home prices are falling, your calculation of the number in step #1 above could be affected dramatically.  If you establish an historically justifiable price that is even a little bit above the current market price, with each day that goes by as the market prices fall, your list price will be getting farther away from your market price and perhaps farther away from a successful sale.

 

The above steps address the more objective aspects of determining your list price.  There are subjective aspects you should consider as well.  These are the state of the economy, your real estate market, supply of homes on the market, supply of buyers in the market, the buyer profile for your type of home, condition of your home related to your comparable sales, etc: 

 

Consider following the above steps to estimate your list price.  If your current list price is justified based on these simple steps then reducing your price might cost you money unnecessarily.  If it is not justified, then a price reduction is probably warranted.

 

(This information is based on HomeSOLDin60TM, the simple six-step process created by Aaron Cole that guarantees a home seller the best chance of getting the best price his or her home in the shortest time.)

Posted in Sellers Market | No Comments »