Real Estate Advice

Turn Back the Clock

Dear Pat,
I've been offered a great job in Maryland, but I'm worried about selling our house in this "buyer's" market. I see many "for sale" signs, but few seem to be selling. We've put the house in top-notch condition in the five years we've owned it, and I really don't want to rent it out if it doesn't sell. Just how bad it it out there?
--We're Leaving

Dear Leavers,
This market has been a major disappointment for those sellers who expected the party to last forever. Buyers, already uneasy about media "bubble" talk, are cautious as they face higher interest rates that limit their spending ability. Realtors and other real estate service providers feel the pinch of reduced volume; and generally there's a lot of hand-wringing going on. That's the feeling.

Here are the facts. I combed through Longfellow sales data for two and three bedroom single family homes for the first six months of this year, and compared the numbers with the same period in 2005. Prices remained steady at an average of about $219,500--no increase this year, but no indication of a "bubble." However, sellers should be cautioned by the fact that, while the number of on-market listings was way up this year, actual closed sales were down by 20%. From my own experience I interpret this to mean that houses sold this year, as the "pick of the litter", were probably superior to the houses sold at the same price last year, when buyers had fewer to choose from. Thus I have to conclude that, in this hidden and impossible-to-measure way, home values have probably gone down. The average price in June actually slipped 7% from June 2005 (too short and too small a sample to cause alarm, but perhaps worth mentioning).

So, to answer your question, Leavers: if your home is in top-notch condition (as you say) and if you are reasonable in your pricing and timing expectations, I would say it's not bad out there at all. My advice is to turn back the clock--in absolute terms, what seller wouldn't be happy with 4 out the 5 last years' appreciation, even if he didn't get that fifth year he had hoped for? Just a few years ago, buyers would have been salivating at the prospect of 6.5% interest rates, and real estate professionals would have turned cartwheels if they were doing 80% of a 2005 volume. Perspective is everything. Good luck!

Pat Rosaves is a full-time real estate professional living in the Seward - Longfellow area. She has more than 29 years experience in helping people with their real estate needs. Questions may be sent to her at River Realty, 2543 38th Avenue South, Mpls, MN 55406. Or call her at 612-724-1314 or email her at Pat@RiverRealty.net