The Great Real Estate Divide

By
Real Estate Agent with Coldwell Banker Residential Brokerage Licensed in Connecticut
http://actvra.in/qwj

real estate divideA new study came out about the great real estate divide between buyers and seller. Although I live the great real estate divide day in and day out, the figures still took me (a bit) by surprise.

The Commercial Record published an article yesterday called "It's Really a Buyers Market". (You may not be able to read it without a subscription, sorry) They published findings by Research Institute for Housing America (associated with the Mortgage Bankers Association) that said it was really a buyers market. Yes, we in real estate know that. But they put a name to the dilemma we often find ourselves in these days.

NEGATIVE SELLING SENTIMENT

The research says that:

92% of current home owners think it is a bad time to sell
80% of consumers interviewed think it is a great time to buy

Another telling statistic:

In the early 1990's, 40 - 60% of home owners felt "relatively positive" with the prospect of selling.

real estate divideHome prices:

For those who purchased their homes from 2007 and up, they valued the sale price of their homes at 14% higher than the actual sale price.

A 350,000 sale price means the home owner believes the home should sell for 399,000. That is a huge difference!

For those who purchase their homes before 2002 overvalued the sale price of their homes at 12% higher than the actual sale price.

A 350,000 sale price means the home owner believes the home should sell for 392,000. That's still a big difference!

The study also notes that inventory is down. I have noticed that, I attributed some of it to the recent storm we had in the Northeast at the end of October, the market really hit the brakes after that. Add the holiday to the mix and we are much lower in inventory than in previous months. But this study was nationwide, not just New England. I am curious to see what 2012 will bring in terms of inventory. Buyers are getting frustrated with the lack of inventory AND the unrealistic pricing we run into.

real estate divideThere are those that believe this lack of inventory may just be what the market needs. That it may help to stop the market from dropping more, may even help to ease prices up a bit. I do not agree with that as a whole, buyers still believe most homes are overpriced. And if the statistics are right, if agents have listed homes at prices their sellers want rather than what they know it will sell for, it will not help as buyers are very, very wary of pricing right now.

We need to bridge the gap between buyers and sellers soon. Sellers need to realize that 80% of consumers believe it is a good time to buy. Yet if they are not buying their home, the reason is price. Price overcomes all obstacles. Selling a home these days requires a seller to be very realistic about pricing, and the listing agent to be very honest with the seller. It is the only way to bridge the gap over the great real estate divide.


Posted by

Andrea Swiedler, Realtor, Southern Litchfield County Real Estate

2017 President, Greater New Milford Board of Realtors

2017 Connecticut Magazine 5 Star Realtor

 

 Search homes for sale in Litchfield County, CT.

 

Coldwell Banker Residential Brokerage

Litchfield County Regional Office,375 Danbury Rd, New Milford, CT 06776

 

© Andrea Swiedler 2009 - 2017

 Always do right. This will gratify some people and astonish the rest. - Mark Twain

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Rainmaker
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Elva Branson-Lee
Solid Source Realty GA - Atlanta, GA
CDPE - Atlanta Real Estate & Short Sale Agent

Andrea, our local paper ran a story on this new MBA report, too. As the market "balances" out over the next few years, maybe there will more of the old win-win sentiment returning to the real estate buying and selling process. Here's 

Dec 30, 2011 01:22 PM #1
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Andrea...

Things will never go back to the way they were. There will be the memory of what happened during this debacle and it will last for generations.

Dec 30, 2011 01:55 PM #2
Rainmaker
842,268
Ann Hayden
Berkshire Hathaway HomeServices Select Properties-St. Louis Missouri - Chesterfield, MO
SelectAnn.com

Andrea,

I hope the market will recover....

HappY New Year!

Ann Hayden in Wildwood, MO

Dec 30, 2011 03:30 PM #3
Rainmaker
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Gail Robinson
William Raveis Real Estate - Southport, CT
CRS, GRI, e-PRO Fairfield County, CT

Andrea - I know a number of people who would like to sell their homes, but are waiting out the market for prices to rise and I have buyers who want to buy, but can't find what they want because inventory is so low.

Dec 31, 2011 01:36 AM #4
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Robert Vegas Bob Swetz
Realty ONE Group - Las Vegas, NV
Las Vegas Henderson Homes for Sale

"Happy New Year 2012" from Vegas Bob & Family in Las Vegas Nevada ... ;o)

Dec 31, 2011 03:33 AM #5
Rainmaker
1,508,690
Patricia Feager
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

Andrea, 

I just wanted to swing on by and say, "Happy New Year!

I wish you success in all you do.

Patricia

Dec 31, 2011 04:57 AM #6
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Andrea, as long as I have been in the business three things have been constant. 

  1. Sellers always think that their house is worth more than it is.
  2. Sellers always think that their house is the best house on the block.
  3. Buyers are always looking for a steal.

I Sellers are waiting for the prices to rise, and inventory is short, those that are on the market could possible get a higher price.

But in my opinion the only thing that is going to turn things around is people feeling secure in their jobs, and putting those that are out of work back to work.  Once that happens it will be HAPPY DAYS AGAIN :)

Let's hope for happy days in 2012 :) :) :)

HAPPY NEW YEAR!!!

Dec 31, 2011 08:18 AM #7
Rainmaker
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Andrew Mooers
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

The divide when you look at the real estate agency, area itself. One by one... more and more differences, distinctions because real estate is local. And every local is not the same. One has homes where your Mr Fix It home, the one with ten foot pole marks all over the exterior has a $400,000 mortgage. Another the home has tin ceilings, fireplace, wrap around porch and country setting for $22,500. In the area of the latter, bean suppers (pronouced sup-PAHHH like lob-STAHHH) and outdoor picnics, hiking, nature are huge. No money used for the fun. In the former, crime, no space, traffic and everything is beaucoup expensive. That's why when an agent speaks of his market, has to disclaim that this is my indoor voice, not the outdoor in general talking for all markets voice.

Dec 31, 2011 11:40 PM #8
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Brian Morgenweck
Power Realty Group, LLC Bergen County, NJ - Hackensack, NJ
Broker/Owner, GRI, CRS, ABR, SRS

Absolutely correct about seller realism & agent honesty... No agent is doing anyone any favors by "blowing smoke" about values, as that'll make the divide even wider. Better to have that tough-love talk ahead of time about real #'s. If it means "smokey" gets the listing because the seller can't or won't be realistic, so be it. They'll remember the honest agent when the listing expires.

Jan 02, 2012 01:05 PM #9
Rainmaker
318,868
Melissa Brown
Helen Adams Realty - Charlotte, NC
Realtor - South Charlotte NC Homes for Sale

The Great Divide is SO TRUE!!!  Yes we do live this divide every day, don't we?

Jan 03, 2012 02:51 PM #10
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Andrea Swiedler
Coldwell Banker Residential Brokerage - New Milford, CT
Realtor, Southern Litchfield County CT

Thank you everyone! Things will never be the same again. I just hope that in 2012 the divide closes a bit. It makes selling so difficult. On either side of the coin.

Jan 04, 2012 12:24 PM #11
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