Market Timing

Its just a bad time to sell....

I have been trying to sell a house for 5 months.... I am going to need to drop the price again.... There arent any buyers out there who have financing.... People can't afford the monthly payments anymore or are unwilling to do so... We have come down 10% already. We are prolly going to cut the price another $30k. I have a job relocation with Fidelity to Dallas and the only saving grace is that we will pocket a lot of money still because a comparable house in a suburb of Dallas is 200k cheaper.

Generally, I'm not an advocate of trying to "time the market." In my 20+ years of city real estate, I've found myself busy on Thanksgiving weekend and even Christmas eve if it's a sought-after listing. That said, I note that city open houses were particularly busy this weekend and there's been an increase in new listings in the last couple of weeks. A welcome percentage of those also received offers. I think sellers should be aware however that timing (as in a Spring market) does not neccessarily translate into a higher price.

In my own experience the maximum amount of lead time going into a weekend builds tremendous positive momentum for sellers (i.e. listing on Monday or Tuesday with maximum exposure on multiple widely viewed websites with first showings during the week leading to an open house on the weekend).

All this said, at the end of a day, a well-priced, attractive home can be sold any day of the week.

It is most simply a question of competition. If there is a crowded marketplace then I would hold off or price based on the competition. If it is an empty marketplace for an in-demand style of home then I would list immediately.

That being said, the seller seems to be moving for a very specific and time dependent reason (need a quick sale). If this is in fact the major motivating factor in this decision then I would say it's impossible for you to find a buyer if nobody knows you are selling. If time is the only factor it is time to get yourself out there.

My husband and I are eager to find a home, but since we are renters know that time is on our side. I am dissappointed by the lack of homes listed in April thus far, I thought there would be more. I am holding out for May now, but just don't know if there will be more then either. Is the whole slowdown in the market and economy holding peopel off? I know from what I've seen if it's a good home priced right, there will be lots of interest, now the question is will it actually get sold? The banks are being much more cautious about lending because of declining values etc.

Common wisdom isn't prevailing amoung todays sellers. It shouldn't
take a year , or even six months to recognize that your property is
overpriced. If your new property tax assessment isn't a good clue,
then go back to sleep. What some sellers fail to see is that a 350 G
bird in the hand is worth roughly 2 G's a month invested. If your property
is the real bargain that you think, plenty of willing bidders will appear
and boost the bid beyond asking price. Too many whiners are asking
way beyond reality and even a year later are wasting their time with
a weak price consolation.

We are currently renters ourselves and have been looking since January. What gave us the real trouble was not finding our home but getting a mortgage. Due to the declining markets they want a 10% down payment not the normal 5%! the banks are very picky even if you credit is awesome!

You ask when home prices peak. And you ask what to cover next on the blog.

I have the same answer to both questions: Look at seasonality.

It's amazing how many people are unaware of the profound effect of seasonality on home sales in the Northeast. It's why we must suffer through the annual spring rite of spin in which MAR and NAR pretend to express gleeful surprise that median prices are going up from winter. No one seems to understand, they always do that in this part of the country.

So, seasonality teaches us that the highest median prices of the year are almost always reported for the month of June.

http://www.bostonbubble.com/forums/viewtopic.php?t=965
(A CPI-adjusted graph, but the shape is the same for nominal prices.)

Since sales are reported when recorded, a June peak points to offers made and accepted in April and May. Those are the months to be on market if you want to fetch the highest prices.

Has anybody noticed that many homes are still priced 5%-20% over town assessments?

This isnt helping home sales volume, which is dismal. It sounds like an easy fix to me.

Connected to this article, about 2000 or more families are faced with eviction in Boston buildings after foreclosure. I work for City Life/Vida Urbana, which has been organizing a growing movement over the last 8 months or so against no-fault bank evictions after foreclosure. We are asking that all occupants be allowed to pay rent. About 2/3 of the people facing eviction are tenants, who were paying market rent before foreclosure. We are asking that they be allowed to continue to pay rent. About a third are former owners; we are asking that they be allowed to pay market rent. The home sale price justified by market rents is a good indicator these days of appraised value in neighborhoods like Dorchester or Hyde Park in Boston.
But the banks are vigorously opposing our effort because they don't want to admit their loss. If they take rent, they will have to admit that the house really isn't worth the mortgage value any more. Banks are even refusing take take offers to buy at appraised value to avoid evicton, probably for the same reason. We are demanding that they admit the loss and not do mass evictions. It is better for the community than having many boarded up buildings.

Steve, what a great cause! Your cause may make my job as a real estate broker more difficult but I'd be willing to have my job made a bit more difficult if it means innocent people are spared the stress and indignity of having to move from their apartment in such a horrible manner. I have been involved in a few of these no-fault bank evictions and I think they are so sad. I'm sure that the vast majority of these tenants didn't know that they could be evicted in the case of foreclosure. In some cases I'm sure these tenants didn't know anything about their eviction until the Constable showed up at the front door with the moving company. I have witnessed worried families scramble to find new living quarters with virtually no warning. Good luck!