"Why do I need to reduce my price for it to sell, can't I just do more advertising?"  "Why are housing prices falling?"

These are some of the questions I find myself answering these days.  Even with all the negative news that is out there, some Sellers are still unrealistic with their expectations of sale price.  Some are still emotionally attached to their "home", others simply can't sell it for what they owe on it.  These are some of the stories, analogies and scrpits I use to try to simplify it down and explain the situation to Sellers who are in an over-priced home. 

Please feel free to comment and share your own stories, scripts and suggestions.

First, it's important to pay attention to what other Sellers are offering their houses for.  These Sellers and their houses are your direct competition.  The Buyers that look at your listing are looking at these as well, and then comparing them to see where they can get the most for their money.  No amount of advertising will sell an over-priced home because the internet makes it is so easy for Buyers to shop around, and they are probably working with a Real Estate Professional who knows the market.  Bottom line is if your property has more to offer and is more affordable than your neighbors', a Buyer will go with your property.

For some perspective, compare the housing market to the stock market.  The stock market is up some days, and it is down other days - the housing market is just a lot slower, and changes every couple years instead of every couple days.  You can't control where the stock market goes, just like you can't control what your neighbors are asking for their properties or what a Buyer is willing to pay for yours.  Think of your house like a stock that is worth more on some days and worth less on others.  When it's time to sell the stock, all the wishing in the world won't make it worth more than what someone is will to pay for it.

I like to compare the situation in today's market to that of a clearance sale at a department store.  The store bought too many t-shirts at the beginning of summer.  Now that its customers are not buying as many t-shirts because it's almost winter (they are buying sweaters instead), and it has a lot of t-shirts in it's inventory, it needs to have a big clearance sale and reduce the prices in order for it to sell the t-shirts.  Otherwise, the t-shirts will sit in the stock rooms until the Buyers are back looking to buy t-shirts again.  In the housing market, there are far more houses for sale than there are people looking to buy them According to the Minneapolis Area Association of Realtors September statistics, there are 10.4 houses on the market across the Twin Cities for every one person looking to buy.  So if you are selling your home, you are competing with 9 or 10 other Sellers for one Buyer - your property needs to look its best and be priced right.

I also like to compare it to buying a sweater at the store.  When you see a sweater you like, the first thing you do is look at the price.  You might try it on, then you might look around and see if there are any other sweaters you like better that might be on sale or selling for a cheaper price.  If you see a sweater you like better, and it fits you better, for less money, why wouldn't you buy it?  This is exactly what Buyers are doing when they are looking at houses, and with so many other homes on the market, you need to be the best deal on the block.

When we look at the numbers for St Croix County in western Wisconsin, unfortunately what we are seeing are declining market prices across the board, and especially with townhouses and condos because many of them are very similar and there are so many of them for sale. There are 112 condos/townhouses for sale right now in the city of Hudson alone, so the competition is stiff.

Median Sales Price for St Croix County (Western WI Realtor Assoc):

March, 2007 = $205,000

April, 2007 = $200,000

May, 2007 = $195,500

June, 2007 = $195,000

July, 2007 = $199,225

Aug, 2007 = $196,500

Sept, 2007 = $186,000

That's a 9% decrease since spring 2007, and the decline has been steady through the summer which is typically the strong season.  Prices are falling across the board, and in order to sell you need to follow the market or be left behind.