Yep, I admit it, it's not fun out there selling real estate in July/August heat.
Our market has gone from frenzied to down right I-don't-even-know-if-there-is-a-word-in-the-English-dictionary-to-describe-what the heck is going on here.
First of all I think two major events occurred to bring this on:
- The banks <it seems> all want to hold an auction in a moving market and lower to "fire sale" prices
- Non-Profit DPA is expected to disappear Oct 1, 2008
I just want to address the first issue I brought up. It is BAD, really really really really bad. So bad I can't put enough "really's" in that last sentence.
Let me just give an example of an offer one of my buyer's agents submitted July 28. That was 11 days ago. This home was on the market since the 21st which was 6 days prior to that. It had 10ish offers on it when we submitted the offer, haven't heard back from the agent, keep calling and it is STILL listed as available some what 17 days later. It is priced 30% below closed comps from June 1, 2008 till now. There is no lack of pendings that are listed at 20-30% higher. This house has four walls, foundation, appliances and is not hindered by fire damage or doesn't appear to have any other issues that we can see.
I can't imagine the nightmare of how many more offers have come in since then. I am really getting to the point where I don't care but care enough to blow off some steam.
Where are these banks getting these prices from? Stuff is moving, stuff is selling. If it is moving and selling in a particular subdivision, there is really no need for this type of pricing nonsense and there is no way to prove on a BPO that homes are going for that fire sale price on a non-fire sale home. The home that sold for 30% more (model match even) just a few weeks before, was on the market 2 days. TWO FULL FREAKING DAYS! It's not like there is even really an issue with hold times when homes are priced properly.
Buyers are out there and they WANT to buy because of the DPA issue. It is taking longer because they don't believe me when I say these fire sale prices are not real prices and these boogers are going for 10-30% more than what they are priced at. Hey Buyers: It's all fun and games until you lose one, two, three or more houses that you fall in love with.
And then the problem is: There are the homes out there priced JUSTTTTTTTTTTTTTT right that the buyers lose out on because they refused to make a decision while playing with fire sale or auction priced homes. They lose out on these homes that are listed for short periods of time (15-30) days because one buyer came along and wrote one offer and the bank took it.
Moral of the story: Buyers shouldn't play with matches or hold all their eggs in one basket at this time. Look at CLOSED comps and be realistic with offers.
Here is another reason why this needs to stop: Future pricing.
Last 10 days I have had to conduct FOUR CMA's for non-distressed sellers in high equity positions. Believe me, I can't believe how lucky I am too.
It took me TWO hours to do ONE pitiful CMA for each property! Unless we price it at fire sale pricing and allow it to be marketed for two, three, four weeks before the sellers (AKA REAL SELLERS) make a decision we (list agent and seller) can't even compete with the foot traffic.
It's fun to see half of a subdivision pending, half listed and half closed in two months. Pretty much, there are hot subdivisions out there that have the potential to end up with only one or two month's inventory. It's fun to see realistic sales prices, it's fun to see pending prices at 30% below those recent realistic sales prices (NOT!) It's impossible to gauge a realistic listing and/or sales price right now. You know, the kind that gets you foot traffic and maybe to net my seller's the "highest and best".
THEN you have to make sure you are being strategic out from the chute so the property can appraise for the sales price if it can sell right away. Pray you don't get an appraiser that weighs heavy on listing prices right now.
Now I am a little pot calling the kettle black here on this issue because I am guilty of using this sales technique but not to the point where the sellers are unable to make a decision past one week so everyone can MOVE ON.
My BPO's are now weighted heavier on the sale side (since the comps actually exist now.) Suggested list prices from me will be realistic. Maybe my competition will hate me but I don't care.
Short sales, they don't even matter even though they are a growing market force. Their prices are now officially higher as a whole than these prices.
The buyers are confused, the list agents are confused, the buyer's agents are confused. I don't even know if the banks have a clue in the world on what is going on here so they are probably confused too. I think I found a term for my really's: Market Discombobulation.