House Hunting

The BBQ Pit
41

Athena, please follow with me in this rambling…

Housing markets have been on a tear. In another thread, you said you bought your house for $250,000 five years ago, correct? I think you said you were trying to sell it for $350,000. That is 40% increase in 5 years. Even if you sell it for $330,000, it is a 32% increase in five years.

Now, keeping this increase in mind, how do markets, like housing markets, experience a decline? Here is my rambling…bear with me…

In my home town, which is a smaller town, it experience an ‘oil boom’. Prices skyrocketed, rents went way up, people built apartment complexes like crazy. After a few years, virtually overnight, the oil went away. Did prices, like rent, come back down quickly? No way. Rent prices stayed way up. People couldn’t afford it since the jobs went away and so moved in together, moved out etc. Vacancy rates approached 85%! Still, they wouldn’t lower their rents. I remember asking a landlord who I was friends with why not lower the rent and he would respond “But the rents were higher two years ago! I’m charging 10% less than two years ago!”

It took FIVE YEARS for rents to get to ‘normalcy’ or close to pre-boom levels. I imagine the same applies to housing markets. Your home was worth $250,000, five years ago and now you can’t sell at $350,000. Housing is a market and has ups and downs. I imagine what is happening is that your sellers in your neighborhood are like that landlord I talked with wondering why prices are going down when the should be going up. The housing market has fallen a bit but your neighborhood needs a long period of time (for you 8 months) to come to that realization.

I feel for you! However, your still making a nice profit from your house and do not make the mistake of looking back and saying…“in the past it sold for $x so that is what it is worth now” like the stock example lucwarm used.

42

Hey Athena,

It may have been lost in my last post (hijack), but I would make sure that the buyer’s agent is indeed getting paid the full 3% on the sale of your home.

I also agree that the housing market has been particularly fickle for the last year (at least in Texas). Give you an example, my wife hasn’t made $.01 in last three months, and last weekend she signed separate transactions.

Anyway, best of luck.

43

Athena, you’re right: nothing is selling. Or, at least, nothing is selling the way that it did a year ago. The real estate boom is over in Colorado for the time being, and people in your situation probably need to revise their expectations accordingly.

Your Realtor is correct that the market sucks right now. My brother is in the process of buying a home, and the seller is offering to carry if need be. As it is, they’re offering something like $5000 or $6000 in incentives on a $125,000 home. I haven’t heard about sellers offering to carry in a long time in Colorado. I think it’s probably been since the late '80s or early '90s.

I believe you live up north, and those people are getting the worst of it. Boulder county reaped the rewards of the overinflated housing market, and now it’s reaping the whirlwind. In most buyers’ eyes, your house just isn’t worth what you have become accustomed to. I hear the new listings are something like ten or twenty times more numerous than they were when we bought our house three years ago. It’s a buyers’ market now, and Boulder is eating it big time. If you bargain-basement your house, you may get better results, and some lucky buyer will get a great deal, but from what I understand, supply and demand has been tilting against you for over a year. Good luck.

44

One other thing, Athena…

Try giving a bonus to the buyer’s agent. I’ve seen them anywhere from $1-3k, and it’s a good way to provide incentive to the other agents to sell your home. This info is usually disclosed on the listing service information that the realtor pulls up prior to making showing appointments, and can provide a real advantage to your house over another’s.

45

It might work, but it pisses me off. The agent is already making several thousand dollars just to drive a prospective buyer around, show some houses and shuffle some paperwork. Lets through in a couple more grand for that 5 hours of work that “agent” has to do! Noting better than making over $2K per hour, eh?