In today's Salt Lake Tribune, "Jillinda Bowers, president of Salt Lake Board of Realtors, said that when homes don't sell, 'our next step is to reduce the price. We have a positive and good market, but with the decline in sales right now, there is a need for more stabilization in the pricing.'"
So, will home prices go down?
Or, in other words, will the actual value of homes go down? Or is she just saying that all of the THOUSANDS of overpriced listings currently on the market will need to lower their asking prices?
Are homes not moving solely because they are overpriced, or has the demand for single family housing in Salt Lake simply slowed? Did almost everyone that wanted to buy a house already do it?
From my perspective, Sellers have been overpricing their homes by more than a year's worth of appreciation since late 2006. In the succeeding "frenzy" there were Buyers who would buy those homes anyway. (We were still able in most transactions to get our clients an "at, or below market value" price even in multiple-offer situations during that time.) Homes that were priced at or near market value would get offers, negotiations would take place, and those homes would sell. Homes that were priced well above market value did not sell. My clients and I walked away from many negotiations where Sellers were unwilling to sell their home at market value.
Here are my thoughts:
1. Sellers that do not need to sell will eventually quit listing their home at well-above-market value.
2. Sellers who need to sell are still willing to negotiate their prices down to at-, near-, or below-market value.
3. Builders who have built very expensive homes (where demand has slowed the most) will lower their prices significantly to finally move the inventory.
4. New Housing Starts will slow until the market gets rid of all the excess inventory via the first 3 points above.
5. Appreciation may dip. I believe that the average Sold Price of Homes will dip, not necessarily because the value of every home will truly drop, but because sales of Luxury and High-End homes will drop the most, bringing down the average value overall.*
6. Salt Lake will lull. We will creep back into the 2-5% appreciation rate range where we sat so comfortably for the 10-15 years preceding this latest market "correction" until we are once again behind the national curve and make another rebound.
Only time will tell. I'm interested in seeing what Spring and Summer bring.
Thoughts from Agents?
Thoughts from the Public?
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*Remind me to look at the total number of homes sold in the following price ranges: under $150,000, $150,000-$250,000, $250,000-$500,000, over $500,000