Foreclosures in Brooklyn Up Slightly But Still Low

Home Prices: Sellers Need to Lower Expectations
Published: Friday, 5 Jun 2009 | 10:05 AM ET Text Size By: Diana Olick
CNBC Real Estate Reporter

AP
Home For Sale – Reduced Priced
——————————————————————————–

A new report out today from online real estate search site, Trulia.com, finds that nearly one in four current sellers, and these are what we call “organic” sellers, not distressed sellers (foreclosures or short sales) have dropped their sale prices at least once.

On average, they’ve dropped prices 10.6 percent from their original list price. If you add it all up, that’s $27.4 billion dollars slashed off either total U.S. home equity, if you choose to see it that way, or at the very least off of seller expectation.

And that’s what I want to focus on: Seller expectation. Yes, we in the big bad media spend all our time shouting out all these nasty numbers of how far home prices have fallen “nationally” (which is bogus since all real estate is local) and how much one foreclosed property takes off the price of neighboring homes.

And yes we say there is no end in sight until the foreclosure crisis ebbs and buyer confidence restores. So why are so many sellers/agents still so far off the mark in gauging their list prices?

In my DC neighborhood, which has seen really minimal foreclosures if any, two nearly identical houses went up for sale this month, within two blocks of each other, at radically different prices: One at $2.2 million and the other at $1.65 million. It’s all about expectations, and clearly sellers, despite all the media blasts about housing, are still unclear where they stand in today’s marketplace.

Neighborhood Realtors told me the first house was radically overpriced, but the sellers were stubborn, and, as expected, they dropped the price after a month of no bites. But they didn’t drop even close to the price of the other house.

Major Jump In Mortgage Rates Hasn’t Hurt Home Sales—Yet
These sellers just think that’s what it’s worth. Now the other sellers may be in more of a hurry to get out; I admit I don’t know, but it will be interesting to see if it goes quickly. I’ve seen houses that are aggressively priced move very quickly, and others not so well priced languish for months.

CNBC.COM SLIDESHOWS:
10 Most Affordable Metro Areas
The World’s Most Expensive Real Estate Markets
Where The $200,000+ Crowd Lives
10 Highest Homeowner Vacancy Rates
Million Dollar Homes Across America
10 Highest Rental Vacancy Rates for Metro Areas
10 Most Popular Relocation Cities

That simply says there is plenty of demand out there, at the right price. I’m already hearing of a return to bidding wars in parts of New York and New Jersey, where prices are too tempting to resist, and out in the most distressed areas of Phoenix and San Diego, sales are bumping up, but I caution that those are mostly on foreclosures.

Are Mozilo And Countrywide Only the First Targets?
It’s the organic market that I still see as the conundrum. Organic sales have fallen off much farther than most buyers and sellers know and/or appreciate, especially on the East Coast.

Organic sales are also more sensitive to mortgage rates, since organic sales are not going to be at the rock-bottom discount rates that foreclosures are. Given that mortgage rates are rising, subtracting buying power from those few in the market, more sellers will likely have to lower their prices and their expectations.

Team Reasonable. Call us One for we are Legion…

“I have a team?! And Chicken is on it? AWESOME! You have made my day, Chicken. Thank you!!!!!!!!!!!!!!!!!!!!

Posted by: mopar at June 3, 2009 10:16 PM”

For some reason, I read “wasder” as “mopar” in wasder’s first post – sorry wasder for not giving you the due credit – but you are definitely in the gang.

It seems like I have accidentally stumbled upon an effective way to recruit new members into Team Reasonable – just pick a person and say that they are in (seems reasonable, no?!)

M4L, you are now a member of Team Reasonable – live with it!

Team Reasonable….we go REASONABLY!!!!

“I’d already signed up to Mopar’s Team as it’s the ultimate winning team.”

I have a team?! And Chicken is on it? AWESOME! You have made my day, Chicken. Thank you!!!!!!!!!!!!!!!!!!!!

Team Bear takes a big greasy Grizzly dump pie to the face……..

Brahhhhhhhaaaaaaaaaaaaaaaaaaaaaa.

Someday this bore is gonna end.