Why homes over $500,000 are almost impossible to sell . . .

By
Real Estate Agent with Sequim & Port Angeles Real Estate

Sequim and Port Angeles homes for sale in the upper price ranges, say above $500,000, are almost impossible to sell right now. Why? There are two major reasons.

Reason No. 1. In Sequim, and even more so in Port Angeles, the percentage of buyers represented in this price range above $500,000 is only about 2% of all buyers in the current market, depending on what week or month you analyze. Generally, over 80% of homes sold here are in the $200,000 to $300,000 price range. Here are the sales for Sequim and Port Angeles in December, 2008 (as of yesterday 12/22/08):

City Sold Price Days On Market
Sequim $169,950.00 146
Sequim $185,000.00 118
Sequim $200,000.00 17
Sequim $230,000.00 413
Sequim $240,000.00 167
Sequim $255,000.00 141
Sequim $269,000.00 13
Sequim $314,900.00 175
Sequim $350,000.00 92
Sequim $743,000.00 4

And Port Angeles sales for December:

City Sold Price Days On Market
Port Angeles $123,000.00 4
Port Angeles $138,000.00 185
Port Angeles $159,900.00 8
Port Angeles $212,000.00 22
Port Angeles $243,000.00 175
Port Angeles $250,000.00 16
Port Angeles $260,000.00 188
Port Angeles $300,000.00 112
Port Angeles $309,500.00 198
Port Angeles $350,000.00 93

Don't get hung up on the "Days on Market," because sometimes the data here is wrong. A long term listing can end up with another agent and the DOM can get set back to zero, although it may have been on the market for months already.

Reason No. 2. Anyone who can afford a $650,000 or $829,000 home is seriously going to consider building their own custom home at that price. Many luxury homes have been built by the owner with some unique characteristics, but a husband and wife buying team are going to say to themselves (as they have told me they do), "Why buy someone else's idea of a custom kitchen, or someone else's idea of a recreation room, or someone else's idea of a shop, when we can buy our own lot for $250,000, plus or minus, and build an incredible home exactly suited to our personal preferences for $400,000 to $450,000, for a total of $650,000 to $700,000, and have what we want."

This is what buyers have been telling me. This is also why lowering the price again and again often doesn't get the house sold. We often like to say, "Well, we're just looking for that one buyer." That's true, we only need one buyer, but eliminating 95% of those in the pool of buyers right now makes for an extremely, almost impossible, sell. Selling luxury homes in Sequim or Port Angeles in this market will require expertise and experience several levels above your average Realtor or enthusiastic homeowner. You might get lucky, but do you want to pin your hopes on luck right now?

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Ambassador
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David M. Childress
Howard Hanna Real Estate Services - Akron, OH
I would love to be your RealtorĀ® in Akron Ohio!

Hey Chuck, you may be right but I don't have that problem here in little ol' Akron, Ohio. That would be an estate around here.   ; )     Have a great 2009!   

Dec 23, 2008 07:46 AM #1
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Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Interesting how markets are different. Here over 500 is moving better than the 275000 to 499 range. Not that they are flying of the shelves. But I did enjoy this post as it gave insight into a different market and how it works. Thanks for the post

Dec 23, 2008 07:53 AM #2
Rainmaker
76,710
Chuck Marunde
Sequim & Port Angeles Real Estate - Sequim, WA
Sequim Real Estate Broker

Andrew, I suppose the jumbo mortgage limits might be a factor, but here I think it would be a very small factor.  Most of our buyers in Sequim are retirees from outside the area, and many of them are not using jumbo loans.  We get some very qualified and quality buyers here, wonderful people.  Even those with cash are putting major buying decisions on hold in the midst of this chaotic market.

Dec 23, 2008 08:07 AM #4
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Folks in the $500K and above market here cannot sell because they are upside down and the houses will not appraise even if they got a contract.

 

Dec 23, 2008 08:19 AM #6
Rainmaker
507,409
Jerry Murphy, CRS, SRES
Long Realty West Valley - Anthem, AZ
Anthem, Phoenix, and Scottsdale AZ Real Estate

The "hot spot" in our market right now is the $100,000-200,000 range.  Not to say that anything over $500,000 is not selling.  But what is often the case is that someone interested in puchasing a home in the half million dollar range needs to sell another home first.  And as we all know, that is somewhat difficult.  Thank you for the information and best of luck.

Dec 23, 2008 08:33 AM #7
Rainmaker
179,177
Ann-Marie Clements
Candidate for an Ed.D. in Educational Leadership - Saint John, NB
Ed.D. candidate, Innovative Proactive Principa

Hi Chuck,

That's the price of the deflating market!  When it's a Buyer's Market, it very difficult to sell higher end homes, but when it's a Seller's Market, they go fairly easy, especially if they have a GREAT view, neighborhood, or schools.

                      ;>)

Dec 23, 2008 08:57 AM #8
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Rainmaker
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Chuck Marunde

Sequim Real Estate Broker
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