Pricing, property condition more important to today's buyers
By Dian Hymer
Buyers aren't the only ones holding back in today's housing market. Many sellers are postponing putting their homes on the market because they are convinced that now is not a good time to sell. They would prefer to wait for a better market.
Waiting could be risky if you need to make a move within the next year or so. Most areas of the country are mired in a slow market where sellers are finding it difficult to sell, at least at a price they'd be willing to accept. There's no guarantee that if you wait to sell that the market will be any better than it is now, at least in the short term.
However, the market isn't slow everywhere. Some areas, like San Francisco, Palo Alto (Calif.) and parts of the East San Francisco Bay Area are still suffering from a lack of inventory. Or, lack of the right kind of inventory.
Recently, there were six offers on a hot new listing in Piedmont, Calif., a city adjacent to Oakland. Multiple offers are commonplace in Palo Alto and San Francisco. What these areas have in common are a coveted location and very low inventory of homes of sale.
Negative press about the real estate market is keeping sellers who could do quite well selling now from doing so. If you'd like to sell, but have been scared off by bad news, don't make a decision until you find out more about what kind of homes are selling in your local market.
HOUSE HUNTING TIP: Supply and demand set the pace of any real estate market. When there are more homes for sale than there are buyers willing to buy, it takes longer to sell and prices are often soft. When there is a shortage of homes for sale and plenty of buyers wanting to buy, good homes sell quickly and there is often an upward pressure on prices.
Even though the overall market might be soft, there can be pockets that are hot. The hot spots needn't necessarily be a specific location. They can be a certain type of house within a location.
For example, the Piedmont listing mentioned above took 13 days to sell. It would have sold more quickly except that the sellers decided to expose the property to the market before entertaining offers. The home was a good size and had broad-based appeal. It had eight rooms, a two-car attached garage, a level-out backyard, and it had been completely remodeled with high-end finishes. It was priced competitively.
Contrast this with another Piedmont listing that did not sell in the three months it was on the market. It was a smaller six-room house with no garage and without a level-out backyard. It had limited appeal in comparison to the listing that sold quickly. And, it was significantly overpriced for the market.
The current market is extremely price-sensitive. An Oakland, Calif., listing was on the market earlier in the year priced approximately $100,000 above what the market would bear. The listing was removed from the market and listed several months later at a realistic price. It sold then with three offers for over the asking price.
Selling in this market is not easy. But, sellers who understand the market can do well selling today. They must be realistic about what they need to do to prepare their home for sale. Property condition is more important to buyers today than it was several years ago.
Sellers also must be committed to the process. There is no margin for error when it comes to pricing.
THE CLOSING: If you can't bring yourself to price to sell, you're not a committed home seller.
Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.
Chicago Real Estate Agent, Regina Zak Tomas