Real Estate Blog - SELLERS NEED TO LISTEN TO BUYERS

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SELLERS NEED TO LISTEN TO BUYERS - THE SILENCE IS SPEAKING VOLUMES

THE HOME BUYING CONSUMER IS IN CONTROL AND THEY ARE GIVING A CLEAR MESSAGE.

Every day we read many real estate articles in blogs, in real estate magazines, in web site content, homes magazines, real estate sections of the news papers, etc. about "How to sell a home in a slow market". In fact, it was recently the subject of a Carnival of Content contest managed by Rich Jacobson.

It would appear that there is a plethora of advice to sellers from real estate agents and brokers, writers of
real estate advice, friends and neighbors advising that:

Things are getting better.
The upturn in the market is just around the corner.
It's always darkest before the dawn.
Sellers should hold out because buyers have to buy.

I believe that there is a very important voice that home sellers are not listening to - home buyers.

HOME BUYERS ARE GIVING THE MARKET THE BOOT, they are staying where they are, renewing their lease or not taking the job in the MD/DC/VA area. The #1 barrier to voluntary relocations to this area is the cost of housing.

PRICES FOR SOLD DETACHED SINGLE FAMILY HOMES 2ND Qtr 2004 - 2007

Fairfax County Virginia homes SOLD
2003 - 2792 properties sold - average price $484,160
2004 - 3174 properties sold - average price $578,569
2005 - 2959 properties sold - average price $698,860
2006 - 2053 properties sold - average price $754,244
2007 - 1810 properties sold - average price $727,342

Median Incomes Fairfax County Residents
2003 - $80,800
2004 - $88,133
2005 - $94,610
2006 - $98,369

It would appear that home prices in Fairfax County have are higher in 2007 by about 30% since 2004.

It would also appear that incomes for Fairfax County residents (home buyers) are higher by about 18% since 2003.

There is, indeed, a disconnect between the rapid increase in home prices in the Washington Metropolitan Area and the gradual increase in wages of home buyers. Interest rates have given no relief because they have edged up for the past 18 months.

Home sellers need to stop listening to advice givers who are painting rosy pictures of the market, advising sellers to just "hold out" and listed to buyer, who are giving a clear message - with their feet.

This post inspired by Colleen Kulikowski

Courtesy: Homefinders.com

Lenn Harley, Broker, Homefinders.com, 800-711-7988, Serving home buyers in Maryland and Northern Virginia

Fairfax County home prices

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 07/21/2007 10:29 AM

Comments (36)

fairfax county home prices

This post has been included in Virginia Information Fairfax County, VA Information

36 Comments on SELLERS NEED TO LISTEN TO BUYERS - THE SILENCE IS SPEAKING VOLUMES

JUL

2007

Could not agree with you more Lenn! My sellers are giving ME a hard time when I show them the stats on what the buyers are choosing (a CMA) they just want me to work miracles to get the job done. I don't take overpriced listings, I analyze comparables carefully but the market has changed in the last couple of months and that is why I send out a CMA every two weeks. I also never promise a rose garden as far as what is going on with the inventory.

Excellent post as usual. Valid points that need to be addressed. I have visited with my sellers about this also.

Lenn, that is a huge difference in the price of homes vs the income increases! Nice post!

its time for the sellers to finally listen to the buyers great Post

Renee. I don't know the market in NV, but I know it here and price is the barrier. Price, price, price has replaced location, location, location.

Judi. It's going to be necessary for agents to do this on a regular basis, as the inventory increases and the prices come down.

Kim. It's a different perspective and, I believe, important.

Jeanne. Absolutely. Sellers would be listening if listing agents were all on the same page.

Lenn - Direct and to the point as usual! I'm with Renee - I don't take overpriced listings and as a result my conversion rate from appointment to listing is down from 93% to about 60% - because I decline to list at the price the seller wants if it's not supported by market data.

I love that whopping last statement....who are giving a clear message - with their feet. That is the whole deal. List right, sell.

Tony. You are smarter than the average bear. This is not a time for the brokers to be looking for "market share". The agents will choke on the marketing costs.

Sally. Thanks Sally. It's the way things are around here.

I have to say, there is a good-natured agent in my office who is trying to insulate his sellers from the reality of the market. Even though his intentions are good, he is doing a dis-service to his clients.

Lenn- I'm working on a post for my other (local)blog about this.. I think in my market buyers have set a limit on what they will pay for certain properties as evidenced by what has sold in the last few months.. sellers with a good not great home who have priced it outside that range are sitting and sitting. Buyers are realizing they can buy a better home by waiting then if the settle for a lesser home too quickly. It's market forces at work.

Lenn, you're right on the money (literally). I've found that some of my clients even when they get a promotion at their (relatively) well-paying job, they're still shocked to find that it's hard to keep up with the price appreciation in the Northern Virginia market. At homebuyer seminars that I've held over the last year, one of the consumers' number one questions is whether salaries are keeping up with home prices. It's obvious they are not. I've received about 5 e-mails from potential clients in the last month who decided not to move to the D.C. area even though they had a good job opportunity.

Kevin. Absolutely correct. The road to EXPIREDS is paved with listings agents' good intentions.

Kaye. Buyers here have just simply gone to the Mall. Or, they're buying a new home here or there.

Lenn--This topic and theme cannot be repeated enough...Homes are not going to sell unless priced properly to bring the buyers into the market. Waiting out the market will take years in many markets...My prediction is 5-7. Does anyone have that kind of time? Good post!

With so much inventory on the market buyers have a lot to choose from. In today's market, here in Long Beach, even properties that are priced correctly may be in jeopardy. Buyers are writing offers on the best home their money will buy, those being mostly turnkey and ready to move into. While price is of the utmost importance in todays market, with so much inventory condition is a very important factor as well. If your home is not in turnkey condition, the price must reflect that as well.

Teri. I'm not sure it will last 5-7 years, but it could. I'm thinking as of today, another 3 years for MD and and Northern Virginia. We've been at a standstill for 2 years. I believe it will take another 6 months before prices start falling and when they start, all of the agents who are buying listings and telling their sellers to "hold out", will be leading the pack to get the prices down.

Laurie. The problem we have here is that the "best home their money will buy" is a piece of crap, or so they tell us.

Lenn, In Poinciana Fl the market sucks. There ain't no way to paint a rosy picture. I tell my sellers upfront that it is going to take along time to sell their house even if we price it below market. If buyers aren't buying...they aren't buying. Nothing I can do about that. Only 2.5% of our inventory is selling every month. That's 50 homes out of 2,000 listings!!! Lot's of thorns...no roses.

Bryant. I read that from agents all over Florida.

I don't believe it's that bad here. Our SOLD numbers are down about 1/3 from this time last year, but it should be a wake up for agents and sellers.

It won't though. Give it another year and we'll clean out a lot of agents.

In our area in Lancaster the buyers seem to be dragging their feet as well. I've posted about that phenomena recently. We're seeing a revival of urban homes in downtown Lancaster where prices are still sane for the average income-earner.

JUL

2007

Lenn - I have had a lot of request for information here lately and it appears the buyers are coming out to play. Still, they are not going to overpay. they are wise, are weighing their options and walking away from unrealistic sellers.

lenn- you hit it on the head! Thanks for a refreshing perspective of reality- and heres to hoping sellers see the writing on the wall !

Jeff. I think you're on to something. Perhaps folks are figuring that if going 50 miles out doesn't get them a terrific price, they might as well buy close to work and get rid of the commute. Our Arlington and Alexandria communties close to DC are doing well too.

Paula. My e-mail is up and phones are busy, but folks aren't here yet or they are luxury buyers that are really skittish.

Michelle. Thanks for dropping by. Let's hope. I still don't see list prices coming down, but I do see a lot of 90% offers going to settlement.

Lenn,

I have had a few that couldn't be pleased either, looking for a $350k condo. Showed them the best of what was out there and they looked at me like I wasn't getting it. Without telling them I took them to see a $650k condo, just kind of slid it in. They lit up and looked at me and said "Now this is more like it". I dumped them, reality is quite a concept. The market may be off, but this isn't fantasyland either folks.

Laurie. I just got off the phone with a buyer who called about a bank owned property. He's looking for a particular community where the new homes with incentives are going to come in around $400,000. He wants a resale for $350,000. Not going to happen.

The bank owned is priced at $420,000 and he wants to offer $250K because he knows that's what they were selling for 5 years ago. I'll save our agent's time and let him find someone else. He's a good buyer, just unrealistic. Who knows, maybe he'll come around.

Laurie

You made me laugh! That's a hoot. Only you (we'll, I'd do that too-for making me waste my time)!

Lenn,

Where the hell was he 5 years ago? I know, 5 years ago, he was out with another agent looking for the prices from 5 years before then. Gotta love these people. He is probably one of those that really believes that if he waits just a little bit longer prices will actually go down to that of 5 years ago too.

I always look these people straight in the eye and tell them, "If it goes on the market at $250, you will never see it, because I would buy it myself, if not me then another agent would grab it before it ever hit the market!"

I put up a listing post recently that said $75k remodel in the title. I actually got an email from somebody yesterday inquiring about the '$75k' 2 bedroom condo. It is the one with the incredible pictures of the beautiful remodel. I haven't laughed that hard in a while.

Kevin,

Exactly, wasting my time, dealing in fantasy, baa bye.

Lenn,

Once again, we all owe you a big Thank You for putting in simple terms what is going on out on the front lines. Here in AZ, we have a 10:1 ratio of Listed Homes : Solds... And we face the same pressures you are experiencing. Prices went UP so much in the past 3 years that incomes now lag A LOT, and affordability is the issue. Couple that to the over-abundance of licensees, and every over-optimistic seller can find several agents to list his/her place. We have over 50000 homes on the market in the PHX area, but only half are serious. Part of our task now is to figure out which sellers are really sellers... Interesting times, yes?

JUL

2007

Aren't the prices way high in Arilington and Alexandria too? I"ve heard that through my L&F friends...

JUL

2007

Laurie. He made me laugh too. I always laugh when a buyer had already decided what they want and what they will pay for it. Funny thing about real estate, buyers don't price properties. They can negotiate prices, but they can't set them.

Patrick. You have the formula right. Prices when up almost 100% and wages when up A LOT LESS.

Jeff. Arlington and Alexandria are a unique market due to the proximity to DC and National Airport. Prices there are holding high and sales are respectible.

AUG

2007

I don't ever "promise them a rose garden". I am strict with my sellers and sometimes down right mean - you just have to be in this market. I closed on two of my listings last week - one (that was priced right on the money) sold in 2 days the other sold after 47 days (after 2 price reductions and a very low ball offer). It always pays to tell the truth and not sugar coat anything with sellers!

Getting low ball offers in this market actually helps bring sellers down to reality, if they are one of those sellers still in outer space or la la land a very low offer will bring them down to earth every time.

MAR

2008

That is a great perspective on how to look at things in a sellers stand point. It is definitely great advice.

Debbie. Your comments are worth gold. I don't know how agents deal with the grief they get from sellers with overpriced listings.

Goodness, live is just too short.

Ryan. Thanks. Let's hope a few listing agents/sellers read it.

I can't agree more. Sellers absolutely need to start listening to the only voice that matters the people who have the power to give them what they need, buyers. Great post Lenn!

Lenn - great article and perspective. It's amazing how much a home costs over there! Hard to imagine coming from Georgetown Texas where the average is about 1/4 that!

David. Thanks. What on earth is taking them so long???? There's still about a 20% disconnect between the average qualifying income and average home price here.

Edward. Thanks. Imagine how disappointed a transferee from Texas feels when they find that they can't buy a 2500 square foot on an acre of land for $250K here. They are really sad. They HAVE to have 4 bedrooms. They MUST have 3 full baths. They MUST have a 3 car garage. They must have that acre or more lot because they don't want neighbors looking in their windows.

Fine, no problem. We have just the home you describe at about $250. "Oh, where is it?" they ask.

IN TEXAS!

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