Buyer demand at the right price

Redfin, a real estate firm serving 25 markets across the nation, conducted a survey of home sellers the first week in October.

The 30 real estate markets or areas surveyed included Colorado (Denver), California, Georgia (Atlanta), Texas (Dallas-Fort Worth, San Antonio), Maryland (Baltimore), Florida (West Palm Beach, Fort Lauderdale), North Carolina (Raleigh), Washington, D.C., Massachusetts (Boston), New York (Manhattan), Pennsylvania (Philadelphia), and Rhode Island.

Sellers in many of these markets realize that the market is no longer “skewed” toward them. Buyers and sellers need to get on the same page regarding a home’s value.

According to Redfin, over the summer many sellers were testing the market and adjusted home prices in September by pricing homes closer to market value.

Almost 60% of sellers polled stated they would wait for the maximum price on their home. Unfortunately, this perspective does not coincide with housing indicators. According to Redfin chief economist Nela Richardson, there is lower price growth and there will be less competition among buyers in the coming months.

She said it best when she said, “Buyer demand is there, but only at the right price.”

Some home owners (36%) are waiting to list their homes until the real estate market improves more.

The lack of inventory in many markets is creating another problem. Homeowners who want to list and sell their homes are concerned about finding another home to purchase.

Home sellers should consider accepting an offer (or consider the value of offers they have received) after looking at comparable properties. After all, when they become buyers, they will want to purchase another property that is of market value and not at a seller’s needed price. By doing so, properties will sell and more properties will list and the market will improve. Interest rates are still low to support housing sales.

Should a seller list a property and hold out for the maximum price, the home may languish on the market and the seller will incur carrying, maintenance and opportunity costs. As the statistics have proven, these sellers often sell for less than if they had initially priced a property at market value. Also, should a buyer present the “maximum price” and require a mortgage, the appraiser may not come up with that value and the offer may have to be downwardly adjusted for sale.

The Census Bureau reported last week that the home ownership rate fell to more than 64% in the third quarter of this year, which is the lowest level in 20 years. Since 2004 when this rate peaked at almost 70%, the number of owner-occupied homes has insignificantly changed, but the number of renter-occupied homes has increased by almost 25%.

There are other factors contributing to the increase in renters.

There are those having damaged credit histories, others not having sufficient means to make a down payment, there are tight lending policies and there are residual fears from the recession — jobs can be lost and home ownership can make it difficult to relocate.

Mary Ann Clark is a Realtor with Coldwell Banker at 189-191 Mason Street in Greenwich. Questions or comments may be emailed to [email protected]

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