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So how far will they drop?

By
Real Estate Agent with West USA Realty

Of course I am talking about prices.  In particular the prices of homes in Surprise.  I hate to be Mr. doom and gloom and I hope I am wrong but we may very well see prices back to where they were before our boom.  

  My family sold our home and we bought another earlier this year.  Just a few years back we had refinanced our home for around $154,000, (we paid $119,000 6 1/2 years ago.)  Then the boom hit and the price of our home went up as high as $250,000 or so.  Prices began to drop and we sold at the right time for us.  Just looked at MLS and found our former home pending for $14,000 less then we sold for.  Thats a $5,000 a month drop on that particular home.  $35,000 away from when we refinanced.   

  I remember last year working with several of my listings in Surprise and I could hardly find any homes below $200,000 -- Now there are many.  We still have 57,000 homes active on the market and more short sales and foreclosures coming on the market daily.  It is harder for people to buy then it was even one year ago.  What does all this mean?  Basically this,  expect that the price of your home may get very close to where it was at before the boom.  You say, "Shayne your nuts."  I hope so, but unfortunately I doubt it.  We have too many active listings, builders are giving great incentives etc. etc.

  What most people do not realize is that our prices started dropping over 1 1/2 years ago.  I sold a home for a client in Peoria late last year, I was their third Realtor.  We met together and discussed what they needed to do to get the home sold and the home sold at around $145 a square foot.  We talked last week, homes in that area are now going for $100 a square foot.  They thanked me for telling them the right price to sell at last year.  People who did not listen to their Realtors last year wish now they had.  I am not saying this to be mean but remember when your Realtor told you last year to drop $10-15,000 and you didn't.  Now your home is going for $30,000 or more below that...you get the picture.

  If you need or want to sell this year then the bottom line is, you need to be aggressive on price before your neighbor is.  Refusing to price right now only means that when you do decide to price your home right you will have to take a bigger jump.  Its not a matter of "If" prices are going to continue to drop, it is a matter of "How Far."  If you need to sell you need to be ahead of the market, not with it.  If you are with everyone else you are already behind.       

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