Real Estate Advice

When Will the Market Change?

Dear Pat,
We bought our 2-bedroom house in the spring of 2004. At the time our agent told us to wait about three years before selling, to make sure we gained enough appreciation to cover the costs of buying and selling. Now we’re ready to move to a larger home, but realtors are giving us market opinions that show we would just barely come out even on the sale. When is this market going to change? Now we’re…
---Stuck

Dear Stuck,
I’d love to duck this question; to just shrug and say, “I dunno, my crystal ball is broken.” But I actually do have an answer—unfortunately, it’s sobering for some sellers. And, it’s only my opinion (albeit an opinion formed in the trenches of daily real estate sales, not in an ivory tower of statistics).

Simply stated, I believe the market will improve when the asking prices of at least half the listings on the market are in a range that is appealing, and feels safe, to buyers. I’ve written previously about the concept of “turning back the clock”—being willing to accept the fact that realistic sale prices are roughly comparable to those in 2005. Sellers who understand this are getting timely sales even in today’s market. Unfortunately, many sellers still expect more than today’s cautious buyers are willing to give them. Waiting doesn’t seem to help: while the statisticians talk about “longer market time,” what is really happening is that most aggressively (high) priced listings don’t ever get a buyer, while the more attractively priced homes often sell quickly. This reality doesn’t show up in statistical averages; it passes as longer market time overall.

So what are these cautious buyers doing? They’re sifting through the huge inventory of listings, looking for the good deal that ensures they won’t be paying too much. Market-weary

sellers must recognize that the bargain hunting won’t stop by wishing it away. No, buyers will return in greater numbers when more sellers offer attractively priced homes—that’s why they call it a market! As demand returns to normal we’ll see prices rise again, and appreciation we can count on.

Am I discouraged? Not a bit. The economy is strong, rates are low, and I sense a new vitality here in the trenches (maybe it’s just Spring!). But today, more than ever, sellers need to make sure their homes are decorated and ready for sale; priced realistically and marketed intelligently. And, as you wait for the market to unstick, Stuck, please consider that—while this may not be the best time for you (with so little equity) to sell—it may well be the best time for you to buy. The two wash well. Good luck!

Pat Rosaves is a full-time real estate professional living in the Seward - Longfellow area. She has more than 30 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