Are home sellers in denial?

Now that is a very good question, and everyone has an opinion. I'll bet you've already framed an answer in your own mind, and now you're waiting to hear what I have to say. Well, here's my answer:

Yes, I think that's true. I've talked to a number of sellers, and even agents, who are convinced that their home is worth 10% higher than it's likely to get in today's market. In fact, even the experts are making that same observation. Just today, I was reading an article in MarketWatch by Rex Nutting, and he quoted the Chief Economist for Naroff Advisors as saying that "we still seem to be in the sellers'denial phase of the market and we haven't even hit the buyer's denial portion of the market, when people don't realize that prices are no longer dropping." What's your opinion?

Many REALTORS are true experts who study real estate, the economy, market trends, the home building industry, and local real estate sales statistics because that is what it takes to be "the real estate experts" in our area. These agents really do know more about real estate than most home sellers, buyers and many agents, and THAT is why we bring value to consumers' real estate transactions. It's why we earn the "big bucks!" (And it's the reason we're more valuable than mere real estate licensees who don't do these things.)

When consumers ask a REALTOR a question - even a casual one like "Are home sellers in denial?" -they'll know the REALTOR is more than one of those "here today, gone tomorrow agents" when the REALTOR quotes statistics and the experts, in addition to sharing anecdotes from their own experience.

Use the links below, if you'd like to read the entire article that is the source of each quote.

Joel Naroff, Chief Economist for Naroff Advisors: "We still seem to be in the sellers' denial phase of the market and we haven't even hit the buyers' denial portion, when people don't realize that prices are no longer dropping." U.S. inventory of homes for sale in May rises to 15-year high

Rex Nutting, Washington Bureau Chief of MarketWatch: "Starts of new homes in the United States dropped by 2.1% to a seasonally adjusted annual pace of 1.47 million in May, the softest pace of groundbreaking since January, the Commerce Department estimated Tuesday." U.S. housing starts fall in May to 1.47 million pace, down 2.1%

Patrick McPherron, economist for Moddy's Economy.com: "The bottom of the housing market appears nowhere in sight." Home builders' confidence falls to 16-year low
Lawrence Yun, Senior Economist for NAR: "I think psychological factors are currently the biggest drag on the housing market, in addition to a disruption from tighter credit for subprime borrowers." Existing-Home Sales Show Market is Under Performing.

Office of Federal Housing Enterprise Oversight: "U.S. home prices increased 0.5% in the first quarter, the slowest quarter-to-quarter price gain in 10 years." Home prices rise at slowest pace in 10 years

Mike Englund, Chief Economist for Action Economics: "Inventories of homes on the market rose by 5% to a record 4.43 million, representing an 8.9-month supply at the May sales pace." Dollar stalls after home sales data.

You can keep up with the experts through MarketWatch, as well as NAR press releases. You can even register to receive a MarketWatch Alert any time there is an article related to the Real Estate industry.

Contact Margaret in Maryland for real estate in the D.C.-Baltimore-Annapolis triangle. (Margaret Woda, RE/MAX Vision)

For more information:
http://www.margaretwoda.com/
mwoda@remax.net

Are home sellers in denial?

Copyright 2007. All rights reserved. Margaret Woda

Lesson learned (again) - Appaisals are not the last word!

Well, actually, that was lesson #3 learned from my listing at 1697 Walleye Dr.

1. The Internet IS a source of business. This listing came to me directly through an ActiveRain.com contact form. The property is located about 3 blocks from my office, in the heart of my target area in Crofton, MD.


2. Do not walk away from any listing, even if it is overpriced. I did at first, but had second thoughts as I drove down the street. The next morning I called the seller and said "If anyone can sell your property for more than $300,000, I can." Over the next few weeks, I had several sign calls on that property, ending up with at least one other listing and sale.


3. Appraisals are not the last word! We did get a full price offer of $333,000 about 30 days later. Concerned about the appraisal, I asked the seller to provide her receipts for renovations, which I then gave to the appraiser. In spite of documentation for more than $50,000 of renovations, the appraisal came in at $295,000, just $11,000 more than she paid for the property in October 2006.

The mortgage lender, new ActiveRainer Don Wilkins, immediately ordered a second appraisal. Again, I met the appraiser and gave him the package of receipts. This time, the appraisal came in at $306,000 - better, of course, but still $27,000 away from the contract price. Many agents and lenders would have let the appraiser have the last word and this sale would have died at this point.


But not me, not us... Super-heroine Margaret, along with super-hero co-op agent, informed our respective clients of the situation and asked how they felt about going forward (without mentioning our own doubts). My client said she would consider it, if the buyers could/would waive the closing help in the original contract. The buyers told their agent that they would waive the closing help in the original contract, if the seller would accept the sale price. Voila! They came together on their own, and they both feel they "won" because the solution was THEIR OWN IDEA.

The buyer and seller reached a fair compromise, facilitated by two experienced agents and a lender willing to seek a second appraisal. They, not the appraiser, got the last word. Settlement will be next week, and all are expected to live happily ever after!

Today's real estate trends, unofifcially speaking...

In the past, I've shared statistics with you from MRIS, the regional multiple listing service, so you would have a realistic picture of real estate activity in Maryland. There's nothing like real data, when it comes to dispelling rumors (and media reports, which tend to be rumors), so that is why I usually go with the facts. Yet there is also a place for informed opinions, and that's what I have to offer you today.

This change of direction was inspired by a phone call yesterday from Andre, one of my blog readers who is relocating from Georgia to Maryland. So here goes:

It is my opinion that home values are relatively safe, at least in my market. They have rarely gone down during my 30+ year career - certainly not in the big picture over any number of years. Home values have gone up pretty consistently, with only a few plateaus. In today's so-called "down" market, we're seeing more of a plateau than a drop in property values, at least in the D.C./Baltimore/Annapolis triangle - UNLESS the property was purchased at the height of the five-year price balloon we saw recently. In those cases, motivated sellers may have to sell their homes for less than they paid... and more than they owe.

Most people own a home for a number of years, however, and property values are likely to be on the rise again for the majority of "balloon" home buyers when they're ready to sell. BRAC is a factor that pretty much guarantees that for local homeowners.

For anyone who doesn't know, BRAC is the Base Realignment and Closing Report, which recommends the consolidation of some government and military services by closing some facilities and expanding others. Maryland is on the receiving end of new jobs in this round of BRAC, and the D.C./Baltimore/Annapolis area is short of housing by tens of thousands for anticipated newcomers. Given the impact of supply and demand on prices, I think that housing is still an excellent investment in this area. The rest of the country may have a very different experience, but Marylanders have good reason to be optimistic - especially those in Anne Arundel, Howard and Harford Counties.

Thanks, Andre, for your phone call yesterday. That report I promised you will be in your email tomorrow. If you have any questions, please don't hesitate to contact me.

Today's real estate trends, unofficially speaking...

Copyright 2007. Margaret Woda. All rights reserved.

Crofton MD - Market Statistics May 2007

Each month, when new sales statistics are published by the Metropolitan Regional Information Systems, Inc. (MRIS) – the multiple listing service for Crofton (21114) – the first thing I look at is the Total New Listings (76) and the Total New Contracts (41). If these numbers are not close, then I can predict the future. How, you might ask? Well, certainly not from watching TV or reading the print media - it’s a case of relying upon my experience, and recognizing the effect of Supply and Demand.

If 76 property owners put their homes on the market in a month when only 41 homebuyers elected to purchase a home, the inventory of homes for sale will continue to grow. Under these circumstances, the number of sold units and $ averages will continue to decline, while days on market will continue to increase over last year as we move forward into the summer of 2007.

Here is a look at the statistics for May 2007, the most recent month for which statistics are available, compared to May 2006:

• Total Sold Dollar Volume: Down 20.78%
• Total Units Sold: Down 13.79%
• Average Sold Price: Down 8.10%
• Median Sold Price: Down 7.91%

As you might expect, the average days on market is another statistic that does not bode well for home sellers: Up 20.69%

It is more difficult to know an accurate percentage for Average Sale Price vs. Average List Price (97.68% in 2007 vs. 97.39% in 2006) because the published information provides the List Price at time of Contract. It does not take into account the original price or any subsequent price reductions. I don’t pay much attention to this, other than to warn my seller clients that they should not expect a full price offer.

Again, the message to home buyers is this: IT'S A GREAT TIME TO BUY A HOME!

For a report on market conditions in YOUR neighborhood, or one in which you're considering a purchase, click on Market Snapshot. You may view it once, or subscribe to ongoing reports on a schedule you specify.

For more information on this topic, visit Margaret Woda at RE/MAX Vision in Crofton.

Crofton MD - Market Statistics May 2007. Copyright June 2007. All rights reserved. Margaret Woda

Annapolis sales statistics - April 2007 vs. 2006

April was NOT good for home sellers in Annapolis (21401 and 21403). But it was GREAT NEWS FOR BUYERS! Let's take a look at the facts, comparing real estate statistics in April 2007 with April 2006:

21401 zipcode:

• Total Sold Dollar Volume: - 35.17 %
• Average Sold Price: - 12.02 %
• Median Sold Price: - 27.15 %
• Total Units Sold: - 26.32 %
• Average Days on Market: +28.17 %
• Average List Price for Solds: - 10.41 %
• Avg Sale Price as a percentage of Avg List Price: 94.38 % (2007), 96.10 % (2006)

21403 zipcode:

• Total Sold Dollar Volume: - 47.56 %
• Average Sold Price: - 32.14 %
• Median Sold Price: - 18.37 %
• Total Units Sold: - 22.73 %
• Average Days on Market: - 8.18 %
• Average List Price for Solds: - 36.62 %
• Avg Sale Price as a percentage of Avg List Price: 93.87 % (2007), 87.68 % (2006)

MRIS publishes market statistics monthly, and these are just the highlights. For information, contact me at mwoda@remax.net