The market is better. It's not wonderful, but it's better. Better than what? Well, better than the last 3 years, that's for sure. Phones are ringing, people are calling for appointments to see homes, homes are selling in fewer than 6 months, and pricing has gotten more realistic at the start of the listing. Lord knows we've had seriously overpriced homes sit on the market for as long as five years (not kidding), but it appears Sellers have gotten the message that prices will go up VERY SLOWLY, over the next 5-15 years. That's the experts talking, not me.
This shouldn't be a surprise to anyone, least of all those of us who weathered the 1987 stock market crash that drove real estate into a ditch from 1990-the late 90s. I've mentioned before that my own home, in Franklin Lakes, was on the market just after the '87 crash, listed at $1,165,000. We had an almost immediate offer of $1,065,000. My genius ex-husband decided we should try bidding them up. They bought another home the next day. We didn't get another offer untl 1991, and that offer was $715,000. By that time the market was all but dead, so we took it. The people who bought the home sold it, in 2000 for $760,000. By 2008 when the new owners asked me to do a market analysis on the home, it was just barely $1 mil. So, it took about 17 years for that home to recover from the market crash --- and let me be clear about this --- this market has been far worse.
I just ran some stats on the first quarter of 2011 as compared to 2012, in Franklin Lakes. I've been saying fo years that the heyday that mansions (homes over 5,000 sf) experienced in the 90s and early 2000s is over. In fact, I believe we are actually going to see some of them not sell at all. Here's what we've seen last year and this:
Year Home Price # of Homes Sold % of List to Sale Price
2011 750k-1,150,000 31 87%
2012 750k-1,150,000 36 91%
2011 1,155,000-1,5mil 4 93%
2012 1,155,000-1.5mil 19 87%
2011 1.55mil - 2mil. 8 88%
2012 1.55mil - 2mil 12 85%
2011 2.1 mil - 10 mil 0
2012 2.1 mil - 10 mil 1 85%
As you can see, the drop in percentage of list to sale price continued even after we were seeing a bit of recovery. Even now that we're selling more homes, we're still seeing relentless Buyers coming in with low offering prices even on ell-priced homes. It sometimes takes losing a few homes to realize you're not in the driver's seat anymore.