With the first quarter market data pulled together there is little news to be excited about unless you are a buyer. First quarter sales for all of metro Atlanta are down by 20% from Q1 2008, and down a whopping 35% for Forsyth County. One of the main reasons why; foreclosures and short-sales. As you will see in the chart below, foreclosures made up over 25% of all sales in the first quarter and the trend is rising.
How does this affect you if you are selling your home and are not in dire-straights? Foreclosures are forcing all sellers to price competitively in order to sell. You must be offering more for less. Even at that, banks are continuing to see their average sales price of foreclosures drop which will continue to erode market values for everyone. The key is to price competitively at the beginning, if you are able to do this. Many sellers are moving by choice or don’t have the equity in their property to price according and will therefore feel the pain for a longer period of time. The result is that if you don’t have to move, you shouldn’t have your home on the market. If you need to sell, it must be marketed extensively and price to move. To drive that point home, see the next graph that details the median number of days-on-market for homes that required a price drop vs. homes that were priced aggressively to begin with:
Higher-priced properties normally take longer to sell, but when a price reduction was necessary, the differences were substantially longer for nearly all price ranges. However, the Seller of a $200K-299K property, required to take a price reduction, needed 11.7 times longer to sell than a Seller in that price range who did not take a price reduction.
It’s a bitter pill to swallow for sellers and an unprecedented opportunity for buyers but it’s better to have the truth and the understanding of how to manage the process then to have sugar-coating and regret. If you want to know the market specifics for your community, contact us and we’ll give it to you straight.
Tags: Days On Market, Foreclosures
May 5th, 2009 at 3:22 pm
Great Post Bob, I will talk with you tomorrow at the meeting.
Joey