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Time to Yank it Off?

"We think maybe we should pull the house off the market and wait until next year...?" Many of our sellers are opening their weekly reports and wondering if waiting until next year would get them a higher price. Showing activity has dropped off and the number of price changes on hotsheets far outnumbers any new sales. Sellers are frustrated after a long hot summer of keeping the house clean and showing ready. We know we've been doing great marketing, so if the house is in good shape and staged to perfection, then price drops are the only thing left to do to get the house sold.

So is yanking the listing off the market a good idea? Probably not.

Patrick Newport, an economist for IHS Global Insights, expects median existing home prices to fall another 8 percent or so before bottoming out in the first quarter of next year. From there, he expects prices to begin a slow and fitful climb.

Yesterday I came across a blog post from Steve Harney that addresses this very issue. Steve clearly states that the experts he follows believe that it will be at least two years before the drop in housing prices stabilizes. Steve concludes his post with this recommendation:

"If you are thinking of waiting for the market to show appreciation before selling your home, you have a two year wait not a one year wait. And if you are looking for double digit appreciation, it is five years away. Perhaps it is best to sell now and get on with the things in your life that caused you to think about moving in the first place".

Sell Now or Wait? What the Experts Are Saying

Excerpts from a blog post by Steve Harney on July 30, 2010 ·

......Is there any evidence that the market will come roaring back next spring? The evidence actually points to the exact opposite. Most experts are predicting that we will not see appreciation until the end of 2012 and even then the appreciation will be minimal...

......“The consensus indicates diminished confidence in the prospects for a near term recovery … This month, 60% of the panelists projected negative home price growth for 2010.” That percentage was up from 40% just two months ago!

......The experts are predicting that cumulative appreciation will not reach positive numbers until the end of 2012 and will still be under 10% by 2014.

This post was written by Leslie Ebersole of Baird & Warner Real Estate.
Use or reproduction of the material published on this site is expressly prohibited
without the express written permission of the author.

My Email leslie.ebersole@bairdwarner.com

My Mobile (630)945-7935

Posted by Leslie Ebersole, REALTOR® Chicago's Western Suburbs on 07/31/2010 11:56 AM

Comments (109)

Selling Your Home in Today's Market in the Home Selling Channel

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Originally posted at: St. Charles IL & the 'Burbs Real Estate : Time to Yank it Off?

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This post has been included in Illinois Real Estate News Kane County, IL Real Estate News Saint Charles, IL Real Estate News

109 Comments on Time to Yank it Off?

JUL

2010

I think the decision is so personal and depends upon their motivation for selling.

I think it really depends on your market. Also the government and the economy are too hard to predict. I think we are going the wrong direction, however, a home purchase may be a great edge against inflation. We should also see the interest rates start to climb.

I had 2 sellers ask me whether they should list now or wait until spring. I really don't think it makes a difference - prices are certainly not going up between now and then and I agree - at least five years or more before prices stabilize - at least in my area.

Leslie, For the most part, I think the San Diego area is at, or near, the bottom. In fact, in many areas sales prices are raising. But, the values are still out there. Personal opinion: Around SoCal, list and buy if you are looking at moving up or down sizing. The trade off of waiting for the market to go up, versus the certainty that rates will go up AND the house you want to buy will go up also negates waiting...hands down.

I agree with Deborah. No point in waiting for house prices to go up when people will not be able to afford them due to the rise in mortgage rates. If you need or want to sell now, sell.

I'm in with Deborah and Jane. If you want to sell now you may not get the price you were hoping but what a deal on your next home and interest rates will never be this low!! Time to make that move and come out on top!

Leslie,

We tend to think that we know where the bottom will be. But we don't. It is when we no longer can buy a property for what it was worth yesterday.

When people say that we are pretty much at the bottom, the only question is whether it can be even bottom..er

Your customer may achieve the same result if they sell today, or if you wait for a few years. If you feel comfortable waiting, wait. If you rather would change something in your life, sell. You will sell anyway in a few months, because if you are thinking about it, you will sell. Then better now than later

Doris: You're right on the point about personal motivation. Some "school year" sellers (and buyers) are about to hang it up...if the house is likely to be a school year buy we've passed the date for getting a sale closed in time to register for the new school year. Thanks for commenting.

Gene: I wonder about the interest rates. I was in a seminar this week where the Chief Economist of Freddie Mac was the speaker. One message is that the Fed will continue to manage the rates to the current levels, with possible very modest increases in the next six - nine months. Good idea about a home purchase being a great hedge against inflation.

Margaret: I sit out here in the west and think that your suburbs are doing so much better. We have a lot of inventory in the subdivisions priced at $500,000 to $800,000. Our upper end ($1,000,000 +) is at a virtual standstill. Some sellers are pretty frustrated. Thanks for commenting.

Deborah: In my area, I see that many of the current mid to upper listings in my market ($400,000 - $700,000) are sellers who need to sell and can't. We had unprecedented amounts of new construction 2000 - 2005, and the sub-prime loans used to purchase those homes represent a large number of vulnerable home owners (e.g. low equity combined with 20-30% loss in value is a house that just can't sell). The dramatic drop in relocation buyers has cut off our home buying engine we had until a few years ago. This creates a log jam in our market.

As I heard this week, the home values in the outer rim of the major metro areas are more fragile and further declines are to be expected. I've been working on a post for on this for days...

Other than all that, I'm pretty positive...at least things are much better than a year ago! Thanks for your comment.

Jane: The last year has been just so crazy. We got busy around August of last year and were crazy until this past month. I'm hoping that some of our recent slow down is due to hot weather, too much rain and normal July-August doldrums. I'm just not sure how many buyers we can reasonably expect in the next few months, regardless of price. Thanks for commenting, I agree with you and the opinions certainly seem to be "stay listed".

Dorie: I agree with you, I'm wondering what to say to the weary sellers. Some are stuck and can't lower their prices due to lack of equity. Out of nowhere, it seems, we got a flurry of listing appointments in the past week....I think that so many sellers rushed to put their homes on the market early this year (Jan-Feb) and now their six month listing agreements are expiring.

Jon: While I try not to give advice, I certainly am responsible for giving good information. It's always the "what do you think?" part of the call that I worry about. Thanks for commenting and also for all your great advice.

AUG

2010

Last time I checked, my crystal ball was still a bit blurred, but... I agree with anyone who says it's not looking good for next year. Price it right and sell it now!

The only time I ever recommended taking a property off the market occurred over the December-February timeframe, since the count of days on market starts over in our mls when a property is off the market 90 days, and the likelihood of that property selling during that timeframe was diminished. The seller was suffering from listing fatigue and I knew she wouldn't make it through those months 'til the spring market. When it did go back on the market, her home sold to the first buyer to see it, and she got full price.

What we can control is only in the NOW. Do they have to sell NOW? If now, we need to evaluate the future in the future. There is no guarantee as in what the future may lie. Could it get worse? It is possible.

Great post Leslie. I can't really understand those that have been loosing potential sales dollars as they repeat this scenario year over year.

If it isn't on the market, it isn't going to sell.

Leslie - Wait a year - lose another 20% - that's the story in the Phoenix metro area.

I definitely say to keep it on the market - why take the risk? I firmly believe that it will be no better next year and the only thing that will have happened is that the seller lost a year.

Wake Forest NC House Chick

Leslie.....homes need to be on the market to sell.....one never knows what the future holds for the seller or the market.....when you least expect it, the seller wants to drop the price and sell quickly.

We still have to remember that all real estate is local. What's good advice for one area may be bad for another.

Interest rates have never been lower. There are buyers out there right now but they will only buy if they percieve the property to be a "great deal." I went on a cma the other day and the seller said"I'm not desperate. I don't have to sell." My suggestion was to wait 3-5 years then. The properties that are selling in the market are the ones that motivated sellers have priced right and put in top condition inside and out.

The sad part to this story is that my competitors are taking these listings from unmotivated sellers and pricing them where the sellers WISH that they would sell for. Three times in the past month I have refused to overprice listings only to see them appear on the mls for rediculous prices. We need to stop taking these "over priced turkeys" and lower the supply of properties on the market. This would be better for the sellers, the buyers, the agents and the market in general too.

Leslie

Going through a similar situation. Sellers have had their home on and off the market for the past 2 years. A couple of homes in the area sold for a lower price but they sold. One recently was a distressed sale so that went really low.

The home shows beautifully, it's priced to sell - but unfortunately - there are approximately 30 other homes in the area (gated community) that have been on the market for a while.

We played the "Stale listing" scenerio - taking it off then putting it back on. My seller has decided to take it off for a couple of months then when the snowbirds come back - put it back on for another "slashed" pricing option.

I agree - I see things getting better in the next 2 1/2 years. Thanks for the post

Leslie... . this makes total sense not to take your house off the market if prices would continue to drop. But one thing that is missing from this post and from those that have that crystal ball stating that home prices will still continue to drop. Real Estate is very local. Sorry, but the statements by Steve and several others irk me... because in some areas, home prices have actually increased, not decreased. My only point is that we need to be universal on this issue... we need to state both sides. Or, in the post, state what markets that we are talking about, because it has been documented in some real estate markets that prices have increased. But as mentioned, with prices down and rates the lowest in over 4 decades, why take that chance. One thing missing from this whole equation.. why are these people selling? Do they have to? Moving up? Moving to another area? Just want a new home? Because this should be part of the equation also.. just my opinion and input... thanks

jeff belonger

There's an opportunity lost by not selling it now. Even if the home prices start to increase, it couldn't make up for the equity they've already lost. No one can really predict the future, we only have the present.

So you don't tell us your conclusion...

but if it is going to sell you better be for sale... now is probably better than next Spring. When 65% of the "experst" agree that we are two years out...watch out as things will happen faster...

Leslie, great piece! I'm off to reblog now and share it with my sellers!

We are building our listing inventory, but activity has been tough !!!!!!!!!!!

Kind of depressing stats. Plus, I can't imagine waiting 2 years just to get on with my life. Price it right and get it sold.

Leslie, Predictions are just that predictions. The only way to know when the market rebounds is when the prices start going up. Then it will be too late. Waiting for the market to change may be too late. Good post!

Good post and very timely - thank you for allowing us to re-blog it! ~ Susan

Very good post... There are always different way to look at thing but our only real option is to take the ride and react to what does happen over the next couple years.

Leslie - I always tell my potential sellers this; 'Babies are born, couples get married, life continues and takes no heed of the market...'. Basically there are always people buying and selling, don't buy into the fear.

Just out of curiousity, I wonder what the source of your statistics is? I agree with comments here that the market is very local. In my area, it is about pricing right first. Most sellers are coming to that understanding and dealing with it. Some are still in denial. Best to work within the current market and make adjustments as we go.

Great post! And I found the comments even more enlightening. Some great thoughts on predicting the future.

Get it sold now...I tend to agree with what the economists are saying. We are still not stabilized in all area's. No one knows when it will stablize, notice I am not saying appreciate.

Price it right and move on with your life, is my advice. Take advantage of the low interest rates.

I think that it doesn't look good when a home is on the market for a really long time, but in this market that is the sign of the times for some. Some of my sellers still are not getting that the market has changed and in order to get their home sold, they have to price it right, and it has to show great! I feel like I am constantly conuseling them on what we have to do to sell their home.
I don't see the market changing in time soon, and now is the best time to sell. The interest rates are helping us and we don't know when that will change! Thank you for the post!

Well, Leslie, if they are planning on buying a larger home (and they're not underwater on their current home), now's probably a great time to sell because the larger, move-up home is also worth a lot less and, therefore, costs a lot less, which will likely result in a lower monthly payment than if they wait a year or two for ALL home prices to rise. For an excellent example of the advantages of selling/buying now, see Karen Crowson‘s post, Movin' On Up - How the Spread Works for You.

I think there are many factors that affect the decision. What I hate seeing now is when the Sellers are getting rid of the properties that they not only can keep, but which are even making them money as vcation rentals.

They are tired of the overall crisis and think that this is all over. They sell at a loss, and I know that in few years they will regret it. We just closed on a nice condo-hotel unit, that had no mortgage, and the rental income covered all expenses.

They sold to a gentleman, and immediately made arrangements with the new owner, that thye will keep coming there and he will rent it to them privately. I begged them not to sell. They decided to sell, so we helped them.

But in 3 years, or whatevere, when the market heats up, they will not blame me for a bad advice

We compare being a seller in today's market to owning a stock that continues to go down in price. While everyone wants to make money or at least break even on an investment, sometimes you just have to cut your losses as soon as possible. It's a harsh bit of reality but that is simply the nature of today's real estate market. Thank you so much for sharing, Leslie. Your post was very informative and well-written.

Don't stop marketing. Have a clause about possession if that is the worry but crank it up. Take the mls images and rotate in new ones so it looks fresh, different perspective. Don't be a Johnny One Time and just uploaded quick, weary copy, so so images and then wonder why the place stalls on the market. Video if no one is using real full motion 30 frames a second with your voice one on one may be the missing ingredients. Get hundreds of thousands of peepers in and out of the place with video to sell it quickly or quicker.

All markets are local, but I would have to agree that it is going to take at least another 3 to 5 years before we see any significant improvements.

I'm considering selling my personal home and even though I read the news, real estate blogs and know my local market inside and out, it is still a tough decision!

All markets are local, but I would have to agree that it is going to take at least another 3 to 5 years before we see any significant improvements.

I'm considering selling my personal home and even though I read the news, real estate blogs and know my local market inside and out, it is still a tough decision!

I'm glad Patrick Newport and Steve Harney are not out here. I'd hate to have to read their doom and gloom predictions every day.

Aren't the experts the ones who pretty well messed things up? Are we sure we should still be listening to them? I thought it was interesting that all the experts at Lehman Brothers, Washington Mutual, etc., simply got new, higher paying jobs with other banks. Huh?

We seem to be in year two of a recovery here. Prices have been steadily rising since February 2009, and sales have been steadily rising since February 2008. Unemployment is falling, major purchases (like cars, washing machines, etc.) are increasing, the consumer confidence index is up.

Perhaps this tells us two things:

All real estate is local, but read the doom and gloom, broadbrush predictions just so you'll know about them.
Get yourself a business plan and then work that plan persistently and consistently every day.

I got started as a real estate agent in August 2005, just after what appears to have been our peak in May 2005. Have I made a million dollars? No. But I also didn't expect to. I had a realistic plan for succeeding, and I'm still here, notwithstanding all the experts who said it was not the time to become a real estate agent.

Don't let other people influence your business! That's the beauty of being self employed, an independent contractor. Only you can influence your business, but if you give in to doom and gloom, I can guarantee you that you'll fail.

In our area not much happens during the winter. However if your lines not in the water, you are not fishing.

I just read all the comments and all I can say from a Newbie's point of view is it seems like most things are based on opinion - kinda like good prophets and bad prophets - will we really know who's right until we get there?

I do appreciate all these opinions however as food for thought while building my own business. It's clear very little is black and white.

Thanks for for the post today. I enjoyed it. My thought is, "he who hesitates is lost!" There's no time like the present if you need or have to move . Go for it. None of us know what the future holds.

Patricia/Seacoast NH

Leslie,

Great post! As others have said, all real estate is local and I suspect that some areas will turn the corner faster than others.

That said, all indications are that 2011 will not be a great year if we cannot get people back to work. 2011 is also the last year for a huge (and I mean HUGE) number of adjustable rate mortgages to adjust. If we don't get people back to work and we allow mortgages rates to adjust upwards, you wind up with the perfect storm. If this happens I think we'll see a record number of foreclosures. Foreclosures drive down home values and make it harder for "traditional" sellers to sell.

The banks know this is coming so I'm hoping they will do something to stabilize their loan portfolios. World Savings did this a few years ago by converting ARMs to a fixed rate note for a number of years.

Time will tell...

Tom

There was a time, let's call it 2 years ago, that I advised several sellers that the market was not conducive to their goals and that pulling the listings from the MLS to try again in a year's time might find them in a stronger position. Wrong strategy. While the price swoon had already begun (to say the least) in 2008, values would tumble all the way down the cliff in '09. We seem to have stabilized to a degree in metro Phoenix (though forecasts still call for additional broad market depreciation), but the lesson is that things can always get worse before they get better. Prices are going to take awhile to rebound, even once things start trending in a positive direction for sellers, so it comes down to this: if you plan/need to move within the next couple of years, I'd personally bite the bullet and do it now. Take possible further depreciation out of the mix by reducing the price and selling it now. If you have no immediate need to move (rather, a want instead of a need), and will only pack up if you get your price, do everyone a favor and take your overpriced home off the market. Do so with the knowledge, however, that you might be sentencing yourself to another 5 to 7 years in that home if prices erode further.

Leslie: One thing's for sure ... real estate, and every issue surrounding it, is very personal. So broad statements regarding the right and wrong of selling or keeping a house on the market must remain that way too. All the outside indicators can point to one decision or another ... but if your internal indicator (your gut) is telling you something else ... I've learned over the years, with real estate it's wise to listen to it.

This is a great example of why your services are so very vital. The experience and advice you offer is invaluable and you provide a great sounding board while customers wrestle with these issues.

Gene

Buyers who jump in now will be sitting pretty in a few years with that low fixed rate mortgage and appreciation that will come eventually. Sellers have to look at their lives and finances and decide if they want to really sell, and get serious about price and condition, or just take it off the market and wait. My advice is to sell it now and take advantage of the low mortgage rates when they purchase a new home. If they wait, prices may decline some, rates will go up, and they've missed a great opportunity.

I agree with you and your experts and I definitely agree with Lenn. If it's not on the market, it's not going to sell. Oh, to have a crystal ball, but since we don't we can use some common sense and know the market is not going to suddenly start a steep climb. Sellers need to get serious about price (and realtors need to help there.) and get on with their lives.

Great information! I have a seller that has only been listed 2 months and is freaking out. They are being good about lowering their price but their home is still overpriced compared to some other homes. Their home is beautiful and it is listed lower then what they paid for it - I'm going to forward your blog to them. Hopefully it will help!:)

Margaret: My crystal ball is downright cloudy, so I rely on input from lots of folks. I agree, some properties don't show well over the winter. A regular subdivision house might look terrific with all the holiday decorations, while a horse property with muddy paddocks looks dreadful. Thanks for commenting.

Loreena: I can't even control "now"! But I live in hope that that perfect buyer will come along for each of my nice listings.

Gabe: You're right. I'm always OK with supporting someone's personal decision, but the rinse and repeat cycle for list and cancel, list and cancel does get frustrating for the agent!

Lenn: You manage to say in ten words what takes me hundreds! Now I have a theme for the mid month reports. Thanks!

Leslie,

Great post! A definitive answer is not always available for this type of question because of the many factors. As Doris stated, it can be a personal decision, but if your client is asking, they obviously want your professional advice and are probably considering it more of a business decision than personal. But as we all know, decisions are rarely made based purely on objectivity; decisions are often swayed by their own personal opinions/perception and opinions of others (neighbors, family, etc.). The seller's perception that the number of days on the market provides buyers with additional bargaining leverage or that their property becomes a bit stale sitting on the market too long are both valid perceptions. But, if the seller isn't going to sell for less than a set price, then it is merely time rather than dimished value - time for the the right buyer to come along (which may be considerable in this market). Deciding to pull a house off the market until the market improves is risky. If the house isn't on the market for a period of time, the opportunity to miss a buyer is real (unlike those opinions or perceptions) and can create an equally real missed opportunity to sell.

Tony: My fears exactly, especially in our outer rim of newer suburbs. I think we still have a foreclosure wave to absorb in the next 24 - 36 months.

Leesa: I like your line, and am going to use it. Thanks!

Barbara: I lie awake at night wondering "who's going to do what?" Life can change in a flash, and suddenly the seller who fussed and moaned for months calls and says "get this over with now!" Thanks for the reminder, I get lost in the thickets of conflicting ideas.

Brian: Of course you're right, and local drives down to neighborhoods and housing types. I can't give away my high end luxury townhouses, but a newer $300,000 Geneva single family can sell in three weeks.

Marvin: Keep those over-priced turkeys out of my barn! I'm with you, I tell the truth on every appointment and don't always win friends that way. It makes me crazy to lose, but I know that at least some of those sellers will be calling me after their house has sat for 9 - 12 months.

Susan: You're touching on one of my ideas right now. Lots of data says that we will have a very slow market for the next few months (despite interest rates!) and that we will see a gradual pick up starting at the end of the year. It's not inconceivable that the Spring market could start in December!

Before dropping the price, have several trusted Realtors look at all your marketing pieces and verbage and know who your target audience is. I have picked up many expired listings that had one or two simple fixes and was able to sell them for more than what the last agent had them listed at. You need to know who is looking for this house and make sure they find it.

Jeff: This post grew to about 700 words and I cut most of the specific information out, although it has crept back into many of my comments. I agree that specific is better, but in this case I was going for snappy! In any case, local area and housing type is part of the equation. For us, anything in jumbo territory has very long market times. Horse properties and luxury townhouses have very, very long sales times right now. In some cases, we have to say "based on the current rate of sales, your home will never sell". My long, boring, wordy economic forecast post is in the wings...very specific to St. Charles, Geneva, Wayne and our other communities...and it has a mix of conclusions. Thanks for commenting.

Certainly can't sell if it's not on the market. There are so many different motivators for putting a property on the market in the first place. No one knows what tomorrow will bring.

Nothing compares to hiring an open, honest, forth-right agent to help price a home to sell in a reasonable amount of time. Then, you can move-on with your dreams for the future.

Great post!

I don't think it's rational to expect any increases & where would they have gotten that idea? As far as I know there isn't an economist out there saying we will. It just means selling your house now or later. You know what the market is doing now & have actually settled in to. What's going to happen next year? I can't see any changes that will be substantial other than interest rates might go up.

Leslie,

I thought of a band-aid when I read your title. It only stings when you first rip it off. However, yank your home off the market too soon and you might feel that sting for many years if you don't weigh that decision carefully.

If they are trading equity into a new home, then why not sell? If they are waiting only to realize a larger gain, then they are gambling on an unknown. Chances are the home they will purchase to replace the one they sell will follow the same trend. Besides, who knows what interest rates will be like in two years?!

Great post.

Judy

Interesting that statistics show book Cook and Lake County have price increases of 5% on last year but McHenry and Kane have decreases. This proves that everything is local, hyper local. Sorry to hear your showings are down I have been my busiest since 2005 when I first started but I know of agents that are doing nothing. As far as selling, reduce the price keep it on the market and sell. Or stay put long term if you want to make more equity, it is not going to ha[ppen overnight.

Every market is different and the national reports may not apply to a given market. It also depends on the situation of the seller. I don't think there are any easy answers or one size fits all answers.

A comment was made in the quote in the post that double digit appreciation is five years away.

Who knew?

Future appreciation will depend on your region? Is it growing or slowing?

Future appreciation will depend on how close the property is to employment/recreational centers. Properties at the outer edge of commuter areas are likely to be hurt permanently as gas prices increase over time. (Such properties are in tremendous oversupply here at this time.]

Beyond those location-based trends:

It is highly unlikely that double-digit appreciation will ever return.

We should pray it does not. If it does, it will only be because our government has screwed things up again -as they did in the most recent boom.

If our clients are expecting high appreciation in the short run, they need some hard-nosed advice.

If we are predicting a return of high appreciation, we are likely committing malpractice.

Hi Leslie, this is the catching a falling knife idea. Tough to get it right sometimes with pricing.

Bernadine: You got it! Right now some houses are losing 1-2% per month in expected sales price as sales slow. Some of our markets are saturated which will further drive down prices. Sad but true.

Perrin: My conclusion will sound backwards to some people, but I think that the more unlikely your house is to sell, the more pressure you have to keep it on the listed. If there will be one luxury townhouse in St. Charles to sell every three months, you better stay listed and show ready so that you're available for that rare decision.

Bob: Thanks!

Michael: Like all businesses, we need to think about the type of inventory we want. That's what I'm working on right now.

Christa: Hard for some people to swallow but this is just the case, isn't it? Thanks for commenting.

Michael: Sellers are buffeted by media messages about the market getting worse one day and improving the next. They look for us to interpret it, but it sure is hard to sort out the information. Thanks for commenting.

Susan: Thanks, I appreciate it.

Jay: It's pretty much been Mr. Toad's Wild Ride for a while now, hasn't it!

Brent and Deb: Life events occur regardless of economist predictions, don't they!

Karen: We sure have great comments here. I am in a planning meeting tomorrow and now I have a ton of input and good ideas. Love this benefit of Active Rain.

There is no perfect time for the buyer or seller. They have to look at their own circumstances.

Jean: For great data and an unending source of market analysis, subscribe to KCMBlog.com. You can also have them post to your FB page, which they seem to do almost every day: Facebook.com/KCM Crew. KCM stands for Keeping Current Matters, the real estate advisory service provided by Steve Harney. KCM always includes their links and sources, so I frequently go look at the supporting detail. We also subscribe to Steve Harney's monthly webinar for real estate professionals, and he distributes a set of powerpoint charts every month to use in our presentations.

I subscribe to Altos Research for detailed weekly reports on zip codes in our market area. This saves me many hours every month on pulling and interpreting local market data. They also produce nifty looking charts and reports to send to clients.

I attended a seminar last week where Frank Nothaft, Chief Economist for Freddie Mac was the lead speaker. He showed that median sales prices will drop over the next six to nine months as inventory continues to grow (national numbers, and of course all markets are local!)

Leslie, I'm living this right now. I just had a seller pull their house off the market, in spite of my pleas so that they could put it back on the market in October. With the summer activities, they were tired if keeping the house clean, as if it will be different in October just about the time the market starts it's winter sleep. This market is different, however and the normal rules for lack of activity are not as set as they once were.

I tried to convince them, the sister that referred this client to me tried to reason with them, but nothing doing. Buyers are still very cautious and waiting for something special to fall in their laps.

Missy: Illinois and Michigan are among the states with higher unemployment and higher excess inventory, so we may have longer to go for price stabilization. It's just the reality of what we have to deal with. Thanks for commenting.

Robin: Frustrating, isn't it. Sometimes the outside source of data can help to overcome the seller's reluctance to accept reality.

Bill: You're right, move ups have a great opportunity right now. We just need more of them!

Jon: I know very little about the investor buyer, or about advantages of holding a property for rental, and learning more is one of my goals for the second half of the year. I know you write about this a lot, so I'll be looking to you for guidance.

Dan and Amy: If a change in life warrants it a move, cutting your losses is the best way to think about it. Thanks for commenting.

Excellent title Leslie. There is nothing to add to this conversation, but I had to stop and say something since the title drew me in.

Lenn's one liner says it all for me. If it's not on the market it can't sell.

I think that since a lot of sellers are looking to pull their listings due to the timing of the school year, it would be wise to STAY on the market and make a price reduction, if possible, and an extra push at marketing. With less competition, it may be their best "window" to sell. Also, you have to look at the loss in the view of the gain that can be made on the buying side with the lower prices and the low interest rates too. Good luck!

Kerry: Deciding to sell can be difficult when you actually have the data. As an agent, though, you can be realistic about price and condition to outsell your competition. Good luck!

Rob: I LOVE your line "If your line isn't in the water, you're not fishing".

Roseanne: I look for input and information from a variety of sources, and then try to apply the best of what I've learned to my own client situations. It is never ending but endlessly fascinating.

Patricia: Just keeping people's spirits up is a full time job.!

Mary Ann: I haven't been inside a casino in years because the unpredictability of winning or losing money makes me dizzy. Some sellers are experiencing this right now, and it's the not knowing that is hard on them.

Marian: Lenn manages to say in a few words what takes me 20 minutes. The voice of experience rings through. Thanks for commenting.

Jim: I think that Steve Harney lives in the New York metro area but he is a national speaker and industry commentator. He ran a large successful brokerage for many years before creating his current company. I listen to him because he lived our lives for many years. Take a look at his blog KCMCrew.com. It presents and interprets market data for use by real estate folks.

IHS Global Insights is a 40 year old research and analysis organization with offices and analysts in US, Canada, Europe, Asia, Australia, India and Africa. They're the big boys and girls of data collection and interpretation.

I attended a seminar this past week where the lead speaker was Frank Nothaft, Chief Economist for Freddie Mac. Not a guy given to much emotion, his presentation was entirely fact-based.

I don't understand why you judge data as being "gloom and doom". Data is just that, data. When people assign value judgments to whether information is good or bad the data loses it's relevance and usefulness. My personal opinion is that we have an obligation to collect and interpret data for our clients. Personally, I find data to be empowering and energizing.

Thanks for commenting and sharing your views.

Tom, tomorrow's blog says what you say more eloquently in your comment, but I'll post mine anyways since it's already written. Maybe I'll conclude my post with "and Tom Branch says so, too".

Is your World Savings reference related to the Resolution Trust solution to the savings and loan collapse in the 1980s?

Paul: Your comment proves that we should be in the data collection and dissemination business and not in the advice business. In fact, during grievance one of the questions is "what advice did you give your client?" Advice can be bad.

I agree whole heartedly that the discretionary sellers should get out of the way for a while. They clog the market and create unrealistic expectations for people who need to sell. Pricing against the competition is useless if all of the competition is wildly over-priced.

The world would be much better if I was in charge.

Gene: I don't mind being the sounding board but I get tired of being the punching bag. The facts are the facts, and I like working with clients who can intelligently use information to make important personal decisions. I find comfort and reassurance in data so I try to collect and use information from many sources. Thank you for your support and counsel.

Blake: You are so right...some houses just have to be left on the market until the right buyer comes along, no matter what market you are in. Some unusual properties are just not as sensitive to price. Thank you for comment, appreciate your thoughtfulness.

Tish: I never mind competing for a listing against another agent who is truthful and careful about their recommendations. It's the ones who are careless that are doing a disservice to their clients and we all suffer a little.

Lyn: well, as you can see from one or two comments there are people who disagree with the general data. I think some sellers and agents are locked into the old model of list and sell in Spring, come off for the Winter. We ran a bunch of numbers late into Friday night and the 12 month, 6 month and 3 month comps seem to show a trend in declining sold prices. It is what it is. Thanks for commenting.

Judy: I like your phrase "trading equity". Great idea, and thanks for sharing it.

Corinne: I've had a great run going back the past 12 months, but lots of it was buyer work. Now is the time to take stock of the current listings and sort out what we should be doing the next few months. There has also been a flurry of new CMAs, I think people who listed in January/February who haven't sold are frustrated and calling in new agents for pricing opinions. And you are absolutely right on the county data: the economist I heard speak this past week said that the outer rim of the major metropolitan areas is more fragile regarding the stabilization of housing prices. I think this is because we had lots of new construction 2000-2005 and lots of those home were financed with sub-primes. These homes in Kane, Will and McHenry counties represent the inventory we're having a harder time with.

Jon: My dream is lots of new listings that need just a couple of simple fixes! You are absolutely right, sometimes it something easily correctable that a new agent will see and convince the seller to address.

Joan: You are absolutely right, there are no easy answers. It's called work for a reason!

Corinne: I have a second comment for your comment. I think the gap between the busy and just-plain-dead agents seems to be growing. More of the transactions are being done by a smaller number of individuals and teams. The busy and successful agents are busier than ever. I have worked my very large rear off to join this group and I want to stay in the game. I wonder what other areas are seeing on this (note to self, good blog idea).

Denise: Thanks for the compliment. This blog evolved into a dissertation on general macro economic theory and I worked to make it more snappy. Maybe slightly spicy titles are the key to success. And Lenn, of course said all I could have said in a much more compelling way. Oh well, still learning.

Gary: There is a line I will definitely use in the future "Pricing is like catching a falling knife." Great!

Cheryl: You are so right, it is always a personal decision. I get tangled up in the "what do you think?" part of the call. Thanks.

Leslie- This has all been said above but to re-iterate what many are saying. Interest rates are at such a low right now that it would not behoove the client to pull the home off the market. There will be a buyer out there. All you need is one. If you are priced right the right buyer will come.

I see what you are saying as to the new construction and that being a major hindrance. Leave it alone. What happens if we do take a dip more you don't want to hear them preach to you "we should have left it on the market". This is like a seller not taking an offer and 3 months later "we should have taken that offer".

Jim: I agree that we should adamantly avoid any claims for appreciation. Over-promising on increasing value has contributed to many client decisions over the years that I hope some agents now regret. And you are right on the "outer edge" property values. Much of that new construction was over-built and over-priced, and is now struggling at resale. Thanks for commenting.

Ed: You and I must have had similar weeks. After a spell of very hot weather, lots of thunderstorms, flooded basements, and inconsiderate buyer's agents who rescheduled multiple times or didn't show up at all, I heard one lady just lose it. She said the house could stay listed if the agent would come wash the kitchen floor for showings. The agent gracefully declined that opportunity but dropped off a chilled bottle of wine. We'll see what happens next week.

Karen: Ding, ding ding!!! You win!!! You can come spend the day at our planning meeting tomorrow, stale donuts will be provided and I might bring in a jug of wine at the end (or we can open up all those bottles of two buck chuck from tour). Seriously, we are going to sort out who we really put a push on because we can realistically show that a price reduction or something new and creative on marketing will make a difference.

Ken: I have definitely gotten out of the advice business. I am trying to get the right level of information into my client's hands for them to make their own decisions. Thanks for backing me up on this idea.

I'm with you on the price drops although I will be in Chicago this week to listen to the sunny optimism of Lawrence Yun of NAR. That being said I do advise clients to take their homes off the market unless they have to sell.

Every market is diffrent. We are seeing recovery in NC so pulling off the market doesn't seem to be agood idea.

Too unknown for me to weigh in on with any confidence, except that I doubt interest rates for purchase will be this low in our lifetime again ! ... but one things for sure - I LOVE your title !!!! lolol !!!!

Joe: Lucky, lucky you. I have to be careful with what I say about the good folks at NAR, several live within a few miles from me. But the public and many real estate professionals have become cynical about continual positive proclamations that seem to directly contradict most economic data. Write a post and give your opinions after the speech, and poke me to read it if you remember. I'd love to hear what you have to say.

Linda: I'm glad to hear your market is doing well. Thanks for commenting.

Leslie,

You sure do something (if not everything) right, as there were reblogs, including such heavy hitter like Lenn.

Good thing with Lenn than whether she criticizes or praises you, you still get a lot of exposure.

BTW, you menu bar is now excellent, thanks

Leslie, I am not sure how to approach this one. In some areas, it might actually be a good idea to remove it for a few months. Here? Maybe.

I appreciate the information on the expectations for price increases. This is important for some sellers as they try to determine what to do next.

Hi Leslie -- Sage advice. Finding the right agent who has both a good macro and micro view on things is key to understanding options.

AUG

2010

Leslie... in regards to your comment, I truly understand about the post exceeding so many words. The last thing that we want to do is put our readers to sleep... lol In any case, this is not at you, but at the so-called experts that make these statements that cover the whole United States.. and not talk about some market areas are different than others. I know a particular area in PA that has increased about 12% in prices in the last 6 months. Now, this is based on what the realtor wrote... look forward to your economic forecast.

jeff belonger

Sheldon: the title is pretty racy for me as a simple midwestern gal, but thanks!

Jon: Lenn sure is the driver of lots of activity, and I'm happy for all the comments and debate.

Aaron: I wish my crystal ball was in better working order. Clients want answers and sometimes they're just not there.

Michael: the listing history is a click a way for us, too. Sometimes computers are just a little too useful!

Christine: what I love about this is that a bunch of people from around the country chatted about stuff I'll be working on next week. Invaluable!

Chris: sometimes I think I should just shut up and go sit a few open houses to fill my time, but thanks for the kind words.

Leslie, great post and congratulations on your feature! I say sell now, don't wait until next year to compete with the inventory and fallen prices.

Leslie,

Timely post. I've been thinking the same thing. On the other hand, anything they want to buy will go up as well.

Location, quality, supply and demand...

A great house in a great location will sell...

Prices here from May 2009 to May 2010 appreciated over 4%. Buyers are showing tendencies to be choosier. A home on the market is in a beauty contest and a pricing war. But if prepared properly and priced properly they will sell quickly.

Another very important issue that many are forgetting is there are thousands of ARM's coming due next year. If these homeowners aren't able to refinance to secure a fixed rate - I have a feeling many will end up in a short sale or a foreclosure situation. Only time will tell - but my advise is to sell now even if you must take a slight loss because the benefits of buying low are huge right now. Could prices drop another 8 to 10% - probably... will they - who knows!

Jennifer: I couldn't agree more. The closed sales prices have ticked up, but the inventory is also increasing. In our areas, about 10% of the total number of listings has closed each month since January, but the total number of new listings is increasing each month.

Bruce: Median closed prices in our area have slightly trended up, but the inventory is remaining high, from 9 months at the very low end to over 8 years at the very high end. Yes, the proverbial price war and beauty contest is firmly in place.

Joshua: Some great houses will sell. At many price points, there simly aren't enough buyers. Thanks for commenting.

Pamela: I'm going with the majority opinion -- sell now. Thanks!

Terry: Don;t you want to shake some people? They want their house to sell over market price but they want to buy at a deep discount. Phew!

Leslie--We get this question all the time. I reblogged.

First, let me start that any economist speculating as to the condition of the market next year should be locked in solitary confinement. The mass media is slowing the recovery by placing doubt in sellers minds with absolutely NO real basis for their claims.

Second, market timing in real estate is just as it is in stocks, if you can see the top or bottom you've missed it. Waiting 12-18 months for a "hot" market is purely driven by FUD (fear, uncertainty, an doubt) relative to the market NOW. If the seller is motivated now, then sell now. They've got real reasons for selling so price for the current market and move ahead.

On a $300K house the potential few points loss or gain bought by waiting months is small. I'd advise them to continue to move ahead, adjust the price as needed, and find their new home. They'll be less stressed by the prospect of trying to sell again in the future and will be able to settle in their new home focused on more important things.

Someone just asked me the other day how the Nashville real estate market was doing. I basically said "nothing". Sure, things have SLOWLY climbed but that is simply something to tell our buyers and sellers ("The market is on the way up"). Sure it is now but it is so slow that I do not foresee anything major between now and next summer. I agree with Bryan, the real estate market is like the stick market. You can't really time it. LONG TERM is key:)

I say it depends on the seller... if you need to get on with your life and you need the money, then sure, it makes sense to 'cut your losses short' and sell as quickly as possible. But if you're not in that situation, then hold on for a couple of years if you can. Or rent out the place if you don't necessarily need the money right away. There are choices in every market, I think. Of course, you might be in a really bad situation, but nevertheless, the choices are the same. Sell, rent, or wait.

No matter what the market is doing, it depends on the needs of the seller. This post is exactly what the seller's are asking around here. Do I lower my price, take it off the market, or what? The answer depends on what you "need" to do. Great post!

Mr and Mrs Seller... you said you wanted to sell. has there ever been a time in your life where you had to give up x to get x? this time is just like that time. giving up the price you hoped to get will be getting you x and further... if you wait would it trouble you if you got x less?

Ya gotta be in it to win it! No sense to deal with the unknown, do what you have to do now to get it sold.

Erica: Thanks, I hope our sellers will be realistic about market conditions.

Bryan:I don't know about locking up those poor economists unless they can all have each other for company! I guess we have no thoughts at all of waiting for a hot market, here in the midwest we don't like all that much excitement ;-) Thanks for commenting.

Stephen: Every market is different, and for us the under $400,000 homes are selling pretty well. The upper end and townhouses are struggling. Thanks for sharing a realistic view.

Joni: Ah ha! The conflict between "need" and "want" truly is the dilemma, isn't it!

Vince: Wouldn't it be great if we could call on each other's clients and have your kind of straight talk. I plan on using your line in a phone call tonight, thanks.

Kathy: I agree, but sometimes those darn clients think we should be able to predict the future.

AUG

2010

Hi Leslie! Great post and the final numbers of the experts' consensus on housing is truly a bit depressing. I have to say though, I've had many sellers ask me this question and I think that it's all determined by their motivation--why do they need to move and how soon. If they can hang onto their home and wait until 2012, they're going to be paying a higher price for the one that they purchase as well--it's all relevent.

Leslie I think it depends on the sellers needs. If they are going to sell and buy another home, then it's a trade off. The home they're buying will be a bargain.

Debe, Bill: It's a double edged sword: some people who are motivated may not have sufficient equity to sell, so their reasoning is that rising prices (their wish) will at least get them out the current home, even if they will end up paying more for their new place in the future.

Thanks for commmenting.

AUG

2010

If you need to sell your home what better time then now to do it. In this area we are seeing a small increase in sales. With that news you will see more homes come on the market to compete with.

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Leslie Ebersole, REALTOR® Chicago's Western Suburbs

Saint Charles, IL

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Baird&Warner Fox Valley

Address: St. Charles, Geneva, Batavia, Wayne, Elburn, Bartlett, No Aurora, So Elgin, SugarGrove, 962 S Randall Rd St. Charles, IL, 60174

Cell Phone: (630) 945-7935

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