On The Level

Published 5:00 pm Thursday, April 30, 2009

I had an interesting call the other day. A potential buyer was driving around a local neighborhood and came upon a street where I had a home listed for sale. There was another home on the same street that had a banner, advertising it was a short sale. [A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold]. The driver asked me what the short sale price on my listing was. I asked nicely why she thought my listing would be a short sale. The answer was that she just assumed everything on the market was a short sale.

Perception

Perception seems to be the new buzz word for our market today. Buyers seem to have the perception that everything on the market is overpriced, and there is a point at which the home can be purchased as a “short sale” if not already in foreclosure or bankruptcy.

 

There are many areas of the country that are experiencing serious declines in their markets, and the daily reports of such are alarming to most of us. What most folks fail to remember in this environment is that every market is different, and just because many areas of the country are suffering losses in the values of real property, it is not happening at the same levels everywhere. Many sellers have their homes on the market for various reasons – as always. With the help of their Realtor® they know they may not realize the same values as they may have three to five years ago, but are selling for reasons of re-locating, retirement or life-style changes.

Bringing back buyers

The following is an excerpt from CNNmoney.com on April 5, 2009.

“No state has been harder hit by the housing bust than California.

“It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was under $250,000, down approx 40% from 12 months earlier, according to the California Association of Realtors.

“There are signs that California’s housing market may be coming out of this tailspin: Sales volume is increasing, investors are returning and inventory is shrinking.

“Low prices have brought out droves of buyers. In February, they purchased more than 600,000 homes, some 80% more than they bought in February 2007, according to CAR. And most of this activity is where prices are off 40% to 60% from their peaks.

“Why talk about California? California was the pace setter for lots of the mortgage products that went toxic. The sense is if the problems can be addressed there, the rest of the country will follow.”

Locally buyers need to understand that EVERY MARKET IS DIFFERENT!!!! Sellers need to realize how those differences will affect their sales price in this area. Realtors® need to work effectively to not only price homes well, but also to make them stand out in the crowd to sell within the most reasonable time by paying attention to the absorption rate in their price range.

Buyers are out there scouting around for the best perception of value in their price range – and rightly so as we have all been on that end of a transaction too.

Buyers also have the tools to see what homes are selling for, so real estate professionals need to be able to support their findings to help a buyer make the right buying decision.

Most importantly Realtors® need to show buyers the value of the homes they are considering, and how the location of the home affects that value. Realtors® need to have all the pertinent facts ready for potential buyers. This includes telling them that every market is different, and just because many areas of the country may be seeing 40% or more reductions in home sales pricing, the case can be made that homes in the Pacific NW and our towns may not fall into that category.

We are lucky to live here, and because our county caters to a high percentage of tourists and boasts some of the most beautiful views and historic locations on the west coast, it is a very attractive place to live, own a second home and/or to retire.

Values here will shift and change and certainly have in the past five years, but may not be at the same low levels that other communities have seen around the country. And, our rate of foreclosures and bankruptcy are not near the rate other areas are suffering.

The current economic climate affects us all in one way or another, but the best advice I would give to anyone buying or selling a home is to hire a professional. Hire a Realtor® to discuss the market conditions of the area in which you are living or looking to buy so your PERCEPTION can become your reality!

Pam Ackley is a broker with Coldwell Banker Kent Price Realty in Seaside and the 2009 President of the Clatsop Association of Realtors. For more information call any local Realtor® today!