Great post and I fully agree.  We've told many sellers if you don't have to sell try it another time.

If only they would all listen.  I've had the hardest time convincing them to rent out for a little under the payment.  There are people who need rentals, and there are even vacant houses.  I don't do property management.  I don't want to.  But I do try and get the homeowners and potential renters to talk. 

Great post, Debbie!  Some balance between supply and demand would be welcome..

Absolutely.  Of course, in my area, the home could easily drop in value by another 10% by this time next year.  That's why they're selling now.  They are unsure of the future.

Great job and an excellent point.  I wish this post was required reading in our marketplace in Austin.  Congrats on getting featured!

Interesting concept. We are in a buyer's market too.

I agree.  It is best not to sell right now if you don't have to.  I have been recommending people to hold off selling if they can avoid it right now.

Paul - Balance is what will bring the demand back here.  Our community is getting ready for a huge growth spurt.  Thanks for stopping by!

Lenn - I don't see our market dropping that much, if at all.  This was for Localism, so I am surprised to see it here!  I'll be writing more about my local market over the next few days.

Jason - I went and cleaned my kitchen, came back to the computer for quite the surprise! 

Karen - I get calls every day from people who aren't quite ready to buy.  Then I see these sellers with vacant houses.  There are hardly any rentals being advertised.  It would be nice to fill a few of these homes - especially going into winter.

Rob - My fellow agents think I'm crazy but I really would rather not have more listings right now!  Not unless they are priced right, ready to sell, and easy to show!

Your right, time removes all risk in Real Estate.  Todays negative cash flow is tomorrows equity.

Take care!

RJH

Sounds like a moratorium on listings would be the vote here.  Or, how about this--Mr/MS Seller there is such an abundance of listings on the market right now that I have to charge 10% listing side.

great post, however I have mixed opinions on the matter.  Yes, i would love to see some of the homes fall off the market for sake of a better chance to sell my listings.  However, here in Reno, NV.  Home prices are still out of reach for the majority of buyers.  I personally would prefer seeing more homes come down in price in order to create a more stable market in the years to come.

Robert - You are so right.  Over time, real estate is always the best investment.

Suzi - LOL If only!

Joshua - It's going to take a little of both.  We also have a serious lack of affordable housing.

Great post Debbie. What is is going to take to get the buyers from under the rocks. There are so many qualified people that are afraid to buy. I wish people would take your advice and consider renting their homes and then purchase some of these great deals that are available. 

Sometimes it is painful to be in the middle of a market correction.

Uh huh!  I am on a moratoriam and people are in shock when I tell them what there home will sell AND APPRAISE for!  I no longer have the time and energy to maintain a large listing inventory when I have hundreds of listings within my brokerage that I have full permission to advertise!

Seems the market is different in all parts of the country. The inventory has lessened here...the military are once again deploying and coming back and who knows what else will happen in the near future!

Does the job market in your area have anything to do with the lack of buyers? Or was it from over building? Our market is slow but prices here are the same as 2005 with many sellers being unrealistic. Our biggest issue is insurance for a home. $350 per month for a house that cost 170k, You learn to dislike insurance companies fast in the market. Being red lined can destroy an area.

You are so right.  Thanks for saying what so many of us are thinking.

I could not agree more.

Here is another idea:  Agents, stop listing homes that are priced too high and sellers are not "serious" about selling.

Don't just stop at telling the seller the truth, walk away from the listing.  Easier said than done, I know.  It makes it very difficult for those of us that are "brutally" honest with potential sellers and then have another agent tell them what they want to hear to get the house listed and then struggle to get a price adjustment later.

I believe this tactic to be a great disservice to the consumer and our colleagues.

Michelle - I cannot speak for your market, of course, but it is my belief that here it's just overwhelming to see three times the normal inventory of homes available.  It takes away the sense of urgency.  Buyers need us to educate them.  For many all they can think of is all those 5% loans, all the zero downs, and all the easy money that seems to have vanished.  I truly believe that once the excess inventory is gone, things will stabilize and hopefully be normal.

Bill - Yes it is.  Some people are going to get hurt.  It is sad but unfortunately it does happen every 30 years or so from what I've learned.  This is a pattern that's been repeated.  Just how do we protect people from next time?  The writing was on the wall.

Renee - I'm not sure I'm ready to refuse listings all together, but I've certainly stopped trying to get all of them!

Sally - Great outlook.  We have to look forward!

Eric - Juneau has always been expensive.  I don't think too much building was the problem.  I do think they type of building is a factor.  A lot of very high end stuff was built over the last several years.  I wish the builders would get us some small condominiums - suitable for one or two people.  They don't have to be fancy, just functional and affordable.  I think that would help a lot of the young people. 

Our economy is driven by government as we are the state capital.  We also see over a million visitors per year and that provides a lot of seasonal employment.  In addition to all that we are a regional medical and shopping center for most of Southeast Alaska.  From 2002 - 2006 we enjoyed a 1% average MONTHLY increase in property values.  It just got out of hand because the economy, while healthy, wasn't enough to sustain those increases.  That, combined with the national issues, caused a rapid stop to all that nonsense.  Sellers seem to be finally getting the memo that they have to be realistic.

Christi - People that know me realize they don't have to ask for my opinion... they will get it anyway!

Edee - So true.  We are dealing with people's life savings much of the time - their hopes and dreams - their futures!  We have a responsibility!

Thank you so much for this post. Interestingly enough, I am trying to convince 2 of my listings' homeowners to do this. One because they can't buy thier new house unless they sell their house and time is running out. And the other because they are paying 2 mortgages. Neither want to rent it although it is the best idea for both.

Stacey - This might help.... renting it out will help stop the bleeding, but someone living in the house could prevent pipes from freezing!  Someone else is shovelling the sidewalk!  Are your sellers willing to pay to have the house cared for all winter?  Of course, tenants must be screened carefully. 

This idea might not work in all areas, but my town has a very, very low vacancy rate.  I see it as a potential win-win for all parties.

I am seeing a lot of people whose homes were overpriced and so now they are taking them off the market and renting them.  I just wonder if that will be good in the long run, if they have overpriced their homes.  It is not at all certain that things will change enough by next spring. 

Joan - It is very likely that in many areas it will not change even through 2008.  Real estate is LOCAL.  When the market does turn, it's going to be hard to keep the sellers reasonable, but we need to.

I totally agree with you. I tried selling my home back in the 80's but no go. I could not GIVE IT AWAY for $150K, today it is worth over $400K. People need to ride this out and by renting their home it could help out tremendously.

When I purchased my home in 1986 my interest rate was 13%, years later I refinanced to 9% and thought that was fantastic. So okay now you know I am an old timer, LOL, but you are right we got spoiled when rates when down to 4.75% years back so now 7% seems high when in fact it is excellent.

Phyllis Pafumi

Debbie, did not know the facts about Juneau, that is almost a blog in itself. Try a localism blog about some area or your favorite condo complex in town. You can watch it fly in google. See ya.

Phyllis - You are definitely NOT an old-timer!  Well, unless that photo of you on your website is about 30 years old, anyway!  You should add it to your AR profile too.  There are so many people with the 1980's stories and those who paid 13% interest (or even more).  Our industry needs for them to speak out now!  We need for people to know that things will be okay.

In the meantime, some buyers are going to get some amazing deals.

Eric - That last post encompasses several of the things on my "blog idea" list.  Don't spoil it for me :) 

People get spoiled, especially those that never suffered through the rates of the past. Our market never had the huge appreciation, we have been slow and steady, and explaining to sellers why they can't sell for more than they bought 1-3 years ago is an ongoing struggle that we face!

Good post and good concept. Here we have a lot of great buys among the large inventory of homes, a lot that are owned by investors, buying when the market was going crazy back in 2005 and they were grabbing everything possible.

You are right that people have too many choices to make decisions, and as a result many make no decision and are not buying.

Debbie, This has been the most interesting discussion I have followed; believe me I have followed many. I appreciate the serious thought behind each of the comments, too. I am glad that I am not alone by encouraging some listings to withdraw rather than discount farther, if that is an option for them.

I have to wonder why builders keep building and building---

The problem with the market right now is that there are too many choices.

Once inventory levels return to normal...

Debbie, the speculators are gone, the mania has subsided, and the suicide loans are adjusting.

The party's over.

Inventory cannot return to normal until prices return to normal. If you want to know where "normal" is, go back to 2000 and appreciate from there, 4-5% per year. I haven't looked at Juneau specifically, but I'd guess that you're still at least 25% overpriced, based on extrapolation from 2000 forward. 

I have to wonder why builders keep building and building---

Builders build. That's what they do. So they either build or go out of business.

Sometimes, in hard times like these, they do both.

Leigh - You are almost fortunate that you didn't have prices going up every time you turned around.  At least you may have affordable homes.  We dont' - yet.

Bob & Carolin - Great minds think alike!

Suzi -Well, that is what builders do... but thanks for the great compliment!

Robert - I'll run the numbers and see just how close you are.  Should be interesting.

Hi debbie.

 If you goto bankrate.com , you will see my very same comments i used in an interview a month ago.

 Down here in florida, every 3rd house is for sale, driving the prices so far down, many are underneath the house, and then the foreclosure /short sales begin. Its a vicious cycle.

www.daviehomefinance.com

We are extremely fortunate to not be in that type of market.  If we were I am sure I would be giving similar advice.

Tom - I really don't think our market is going to go that far down.  We are a town of 30,000 and have about 115 single family homes on the market.  There are also a good number of attached homes (also called 0-Lots in some markets).  About 60 would be balanced for this area.  At this time we have about an eight month supply of homes on the market.  We usually only have a 4 month supply. 

Randy - After all - you are in paradise! 

I have told many of people the same thing over this past year. Rent out your home and we will sell it in a couple of year. NO one has listened yet.

Debbie,

This is well written, and to the point.  Congratulations on the feature!

Mike in Tucson

What we are experiencing in Central Florida presently, is a flood both of homes for sale, and homes for rent. What we are lacking presently, are the people to fill either. How about wintering here and we will summer there!  Best of both worlds

Debbie - I'm with you on this.  It's time to get the inventory adjusted.  Only truly motivated sellers who price their homes realistically are going to sell.  In my area, I think about 75% of our inventory is priced way too high, and will eventually expire.  If they would just get off the market, whether they rent it or simply stay put, it would make the whole real estate picture look a lot better!

Steve - The ones who listen first will survive this.  Otherwise things will continue to decline.  Then it gets ugly.  I'd like to prevent that.

Mike - Thank you!

Allison - Winter is my catch-up time.  I'd be too busy playing in the sun to get anything accomplished!  At this point we've still got the people.  This will be a temporary measure, I hope!  That is, if anybody listens.

Vicki - That's another part of the picture here as well.  Only those who truly NEED to sell should.  If everyone else waits, our indicators show we will still be okay.  The national picture may be different from the local one.

Debbie,

Great post! I agree with you that some sellers with overpriced properties should remove their listing from the market. In doing so, we can correct the imbalance of supply and demand in the market. This will help to stabilize the market and bring more buyers into the market as they see a dwindling supply of inventory for sale. You hit the subject right on target. So everyone, go get buyers and I'll take care of the listing side! :)

Dave

The rental supply/demand imbalance would be no better.  A better idea would be to price the homes to sell.  Buyer are waiting for homes to be priced to sell... when they are priced appropriately to the market, they will sell... the inventory will start to go down... and balance will start to return to the market.  We have to work through the problem... or it will not go away.  

Dave - LOL if I'm just in the action, I'm happy. 

Lane - We still wouldn't have a rental supply and demand problem.  We have a critical shortage of rentals but for so long, property owners would be so demanding on tenants, charge the absolute top of the market, then of course, no pets, etc.  They still need to screen carefully of course, but if they let up a little on the rent and other demands, the homes would rent.  Granted, the old apartments would start to open up but they are overpriced as well.  How does a clerk in a grocery store pay $1000 per month plus utilities?

To a certain point, we need to work through the inventory.  People will always buy and sell no matter what the market.  However, I just encourage those who can wait this out to do so.

This is what I recommend for MY market.  I don't know the other markets enough to comment.

I recommend this in my market too - the only problem is getting the sellers to take the good advice! 

I tell them this is not the time to "test" the market, there are thousands of people out there that have already tested it for you. 

Debbie Cook - If we could get the non-serious ones out of the way, we could sell our inventory!  Ours really isn't that crazy.  Sellers market <40 homes, Balanced market <75 homes, Current market 115.  I didn't include attached, condominiums, etc in this number but they are pretty much in line with the single family market situation.

Gena - I don't see quite that many here, and I hope I never will.  I've seen 2 houses on a street, maybe three, but I haven't seen several side by side like that.  I hope you put your comment back.  I think it was pertinent.

To everyone - Please remember that when I wrote this, it was only on "Posts to Localism" and the "RE/MAX Active Rain" groups.  I had no idea it was going to be featured and seen by quite so many people in so many different markets (although I'm flattered!).  What I'm suggesting is what I think needs to happen in my little community thousands of miles away from most of you.  We don't usually follow the "outside" trends.  You cannot drive here and we are 900 miles from Seattle and over 600 from Anchorage.   

Now that I received the honor of a feature, I hope my ideas help agents in other areas deal with the situation in thier own market.  I'm open to suggestions on mine as well!

Comment updated.

Debbie, I've been telling homeowners for some time now not to sell. It's the old supply demand theory. In the Sacramento area which is 7th in Nation for Foreclosures we are seeing an unbelievable amount of Short Sales, Foreclosures and Homes For Sale. Just the other day, driving down a street within 6 houses, there were 5 for sale signs. These Sellers need to realize that they are hurting themselves by doing this.

Of course there are reasons you have to put your house on the market but you just can't tell me that all of these Sellers HAVE to sell.

Great article Debbie, I had no idea about your area in Alaska. Thanks for sharing and hope to see some gorgeous pictures of probably the prettiest area in the world, Juneau, Alaska.

Hi Debbie,
Agree 100 per cent and when people call me to list their homes, they cannot believe that I tell them to hold off it they can.  You did a great job with this article, look forward to more from you.

Cynthia - Thanks!

I agree 10000 percent! If a seller really isn't motivated to sell this isn't the market for them!

One of the most liberating and exhilerating things I ever do is when I fire a client.  I recently fired a $1.1 Million dollar seller - my highest priced listing ever... but it was hanging like an albatros around my neck - I was spending money, time and energy on a dud that wasn't going to sell... Now it's listed with another realtor (the THIRD realtor to work with these sellers) and she has already had it for 6 months - no price reduction - no contract.  Whew!  I'm sure glad that house is no longer my responsibility!  Now I have more time and money to offer my clients who are actually going to buy or sell!

I think it is a good time to buy if you can get financing. It seemed that in the past any one with a pulse was able to qualify for one of a multitude of loan programs. No so any more.

Good post!

Take care and good luck to you!

Debbie,

Great post---can we publish it in all of the major US newspapers???  With the rental demand picking up, I honestly don't know why more folks don't take this option.

I guess being up in Alask is different - I don't know.  But here in the mid-west telling your people to take their home off the market and rent would be silly.  If you don't want your listings send them my way. I'm on a listing excursion right now out to get as many as I can possibly get.  Why?  Because come this Spring I'll be sitting pretty.  New construction is six months out so what are people going to have to buy in this up and coming election year?  Existing property.  It will take a year for new construction to catch up which will start the process of leveling out the market. 

The problem is for our sellers is that as soon as they start getting what they want for their homes they're going to start paying what the other sellers as asking for theirs - and historically speaking with higher interest rates.  The "problem" is the amount of foreclosures and as someone else eluded to - too many homes on the market that need staged/ the assistance of a professional.  How much Real Estate has changed hands in your area this year as to last year?  Here we're down 1.6 Billion from 1.8 Billion - which divides out to be 2 Million per individual market. (Suburbs, east side, etc...) Something is selling!  If you're a Realtor and you haven't got your piece of the pie by getting and assisting clients achieve their goals and thus earn a fat check for all your hard work then the problem is really you - not the market.  In fact - if you're not the problem there is no solution.  I don't want to blow smoke your way I think that's just telling it like it is.  To sit and agree with each other about how this is worsee and that is worse when in reality it's all relative is ridiculous.  When it's a buyers market you sell low and buy low - when it's a sellers market you sell high and buy high.  It's all relative.  It wouldn't be a buyers market if you didn't have the inventory to begin with. 

AnnMarie - Thank you for stopping by!

Ginger - Some listings aren't worth it.  That one sounds like it fits that description!

Armondo - Yes, the easy money is behind us, but ready and able buyers can get some great deals!

Diane - I would be shocked if even my local paper printed this!

Jon - At least in this part of Alaska, it is different.  That's why this was posted to Localism.  Our default rate on sub-prime mortgages is only 1.66%.  It is my opinion that if we could reduce the inventory, our market would return to normal.  I think my market is plenty healthy (link to my newest post) but for some people this isn't the right time to sell.  I've got over 20 listings and plenty more in the pipeline.  Some of these people should wait.  My clients are mostly friends, and I am trying to protect them.  Thanks for your comments!

I'm with Jon H.;  In order to sell, it has to be listed. Price and quality of home are the great equalizers.

Gene - Not everyone MUST sell right now and I think this advice was pertinent for a few people.  Best of luck to you. 

In Central Ohio, Clintoville and Worthington we have way too many homes on the market. If a seller really needs to sell, they will need to get their home in tip-top shape and price it below the last SOLD comp. If they are not willing to do that, then perhaps they do need to take the home off the market and rent it.

Joe - Thank you for your comment.  Our market is definitely different than yours.  As it is, we have all of 133 single family and attached (zero lot lines they are called in some areas).  It really isn't that much when you consider all the other factors, it's just that for a few years the count was about half that.  Still through all this we have under 1% vacancy rate on rentals.  If our rental rate was 5% I'd never make such a suggestion.  Of course there are a few people who are upside down on their equity.  However, the indicators around here show this dip isn't going to last for long so I think for a few property owners, renting is a good option for a little while.  Thank you for your comments and I think I'll go to work with a smile today knowing that our market looks pretty good!  7:55 AM so I'd better get ready :)

Debbie - your post did inspire mine and I thank you!  You seem like a really great person and conscientious Realtor.  My response to your post was geared mainly at the response you were getting from your post - just for the record.  Best of luck to you in all you do!  Keep putting your clients first and success will find you all the way to the bank - and there's nothing wrong with being rewarded financially for your experience and efforts, afterall we're also building a business through service to others. 

Jon

Jon - See, we can agree to disagree.  My tactic with a few select sellers isn't what I'd recommend for everyone but there are situations that warrant stepping back.  In my area this was one way to accomplish what the homeowner needed.  Since they are not leaving town this worked for them.  I've built my business looking at the long term from day one.  Thanks again.

I am still with Jon H. A well prepared home by conscientious sellers and agent who price it just right are way ahead of the pack. Fear is not a virtue.

I'm not afraid of anything.  I'm not going to advise a seller to lose money on a house when there is another way for them to get through this temporary situation.  Why do you keep coming back?  There are lots of other things you could be reading.

http://activerain.com/blogsview/44665/ActiveRain-Community-Guidelines

I will leave this link up for a day or two.  The rude comments are going to get deleted.  This blog was written for Localism.  I don't appreciate the tone of a few of the comments above and I feel they are against the guidelines.  Name calling and insults don't belong on here.  Thank you.

I made it to this blog because of another blog that referred to a blog referring to this one...good grief, anyway, I found it because the original blog mentioned the drama that was unfolding here and my own morbid curiousity took over to see what was going on.  Did you delete or is this it?  The only reason I ask is because when I read all of the comments, it looked like a differing opinion rather than offensive bashing.  Just curious...anyway, I agree with your comment on the original post that led me here that it's your blog and if you don't like something, hit delete. I tend to not hit delete on mine but I haven't found anyone to be "deletedly rude" as of yet.

Take care and oh, I happen to agree with you by the way about selling!  If you don't NEED to sell, don't sell right now.

Good grief is right.  This was written to my LOCAL market for a little place called LOCALISM.

I haven't deleted a thing.  Yet.

Let me reiterate I was speaking to a community with a less than 1% vacancy rate on rentals. 

Sometimes a feature isn't always it's cracked up to be!

I hear ya.  I'm different than a lot of folks, I actually read the posts I comment on.  Even so, I've had to go back and clarify posted comments because what I intended to convey was completely independent of perception. It's easy to do in a forum such as this. 

Take care!