The hardest part of my job in some markets is to convey to my Seller client why their home is not getting shown more and why they are not getting any offers. This is a typical conversation now a days whether the house has been listed with me for 2 months or 2 “weeks,” but as I say it depends on the market.
Winder Georgia for example has been loaded down with foreclosure resales over the past two plus years. Right now, and according to Trulia there are 845 homes for sale with 409 being foreclosure “resales.” Roughly 45-50 percent of all homes actively on the market for sale are bank owned!
Compare this to the foreclosure national average on sales last month where foreclosure resales were 31 percent of all foreclosure or Athens where the number is a “tiny” 15 percent by comparison.
So we have a typical Winder neighborhood where absorption rates or monthly housing supply is fairly low by national standards yet the only homes selling in the past six months are all foreclosures.
How to compete? Not sure you can! I have said for a while now that if area foreclosures such as in Crystal Meadows are selling for $189,000 and this home was built and sold as a $220k+ build out 3-4 years ago, then how can that home currently listed for $189,000 compete when it “is” what a $189,000 home “should be” without the ravages of a foreclosure market staring us in the face. In reality, if that 4000 sq foot foreclosure is now worth $189,000 then it can be assumed that the 2000 square foot home is no longer worth $189,000 but something less than that. I found out today that this is exactly the case. A fresh closing in the same subdivision as my $189,000 listing took place recently. This sold home is the same home with the same floor plan as my listing and it sold for….$132,000.
Why did we price it where we did? Why do any sellers price a home the way they do? Three reasons really. One is that sellers of non-distressed property don’t want to hear that their homes are worth at times depending on the market or location up to $50,000 less. At times it is motivation or the lack thereof to “have to sell.” Finally and more times than not it is a reason of not being able to sell at a lesser price due to debt on the home and not wanting to go “short” in a sale.
What’s the answer? Not sure of that either. Time might be the best ally to a home seller today, if they can wait.
