I wanted to share a recent experience that I think demonstrates some of our current problems with this market. The other day I was showing a bank-owned townhouse selling for $239,900 in a very nice newer subdivision in Frederick. There are 10 similar homes in this development that are on the market for $270,000- $300,000 there. (Whoops, I almost said "selling for $270,000-$300,000". Nothing's selling.) A year ago, they were selling in the mid-$300,000s.
Something happened that hasn't in quite a while. There were actually two other Realtors showing the same property to two other families at the same time! Remember the good old days? It was, needless to say, a little crowded. Three realtors, three families with children in tow.
Unfortunately, the townhouse was in pretty poor condition. It needed carpet and paint throughout, holes repaired, vanity doors replaced, railing repaired. etc. It seems that people not paying their mortgage tend not to maintain their homes very well. A small investment in new carpet and a few days fixing up would turn this home into a real gem. Unfortunately, none of the buyers could see past it's present state. Mine said he didn't even want to think about the work involved. No one has made an offer on this home and it still sits and sits and sits. Sad and neglected.
All these foreclosures are adding to an already huge inventory, 14 months in my local market. Buyers have to look at them in hopes of getting a good deal and are then disappointed in the condition of these houses. But they have to work through them and eliminate them before they will consider paying market price for a home in good condition. Our buyers have become spoiled and accustomed to home builders and Realtors showing them houses in pristine condition with no extra work or investment required.
As Realtors, we need to explain this situation to our customers and clients, buyers and sellers alike. Until the market corrects itself, we need to manage their expectations and expect to show a lot more houses.
Rick
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