Nov. 13, 2008 – The housing market may have bust, but many homeowners are still living in a bubble. Despite dismal housing headlines and reports showing falling prices nationwide, owners in some once-hot areas still believe their home is gaining value or at least holding its own. And by hanging onto too-high expectations, sellers are unwittingly keeping the market from finding a bottom. Real estate professionals across the country are reporting difficulty convincing sellers the true market value of their homes.
Most sellers have unrealistic initial listing prices for their homes, plus think their home’s price has increased or stayed the same in the past year.
The median sales price of an existing home dropped 9 percent to $191,600 in September from a year ago, according to the National Association of Realtors.
Most sellers have not acknowledged the severity of the market & have upgraded and remodeled
personalized them, thus creating an extension of themselves.“
This puts Realtors in a precarious position of pricing a house to sell, but not insulting the homeowner by recommending a lower asking price. To a homeowner, a low, but realistic, listing price is “like someone calling your kids ugly,”
Most Realtors agree to list the owner’s asking price as long as they can reevaluate the price in 30 days if the house doesn’t sell.
Homeowners who bought newly built homes at the height of the boom are the most stubborn because they’re trying to get back every penny they spent on customized changes. Sellers are fixated on how much they paid for particular changes, but buyers out there don’t value them.
The market would bottom out sooner if sellers weren’t so stubborn and didn’t keep prices artificially high.
Homeowners can’t stand taking a loss on their properties, yet keeping their home on the market at an inflated price could wind up costing them more. Homeowners need to look at the larger financial picture & determine how much there is to gain or lose by keeping a home on the sales block longer.
Real estate agents press this point on their clients, saying no one wants to buy the most expensive house on the block. After the first reduction in listing price, a psychological barrier, subsequent cuts come easier.
Like any type of loss, there’s a grieving process. First, they’re in denial, then angry, then depressed and hopeless. But then they eventually move on if they want to sell it.