RISMEDIA, Oct. 14, 2008-Now is a time to face facts. In the past four months, research suggests that housing inventory has climbed to an 11-month-plus supply.
According to NAR, in fact, there was an 11.1-month supply of homes in June 2008.
As an industry, we need to come together to focus on the best strategies for getting this inventory sold. Putting new tools into the hands of home buyers-including the recently enacted housing stimulus package-is certainly expected to spark an uptick in the months ahead, but in the meantime, it is our responsibility to encourage sellers and agents to price properties correctly in order to start moving this abundance of inventory off the market. NAR has several consumer-focused tools available at www.REALTOR.org to help the cause, including publications like “It’s a Great Time to Buy, Getting it Sold,” and “Pricing Your Home to Sell,” and helpful toolkits, such as, “Tips for Pricing Your Home.”
In this month’s Power Broker Roundtable, panelists tell us why it’s so important to work with sellers to price properties correctly, and how this effort is critical to reducing housing inventory.
Moderator: Alex Perriello, Special Liaison for Large Firm Relations, NAR
Participants: C. Dan Joyner, Broker/Owner, Prudential C. Dan Joyner REALTORS®, Greenville, South Carolina
Robert Weber, President, First Weber Group, Greater Wisconsin
Pat Riley, President and COO, Allen Tate Companies, Charlotte, North Carolina
Alex Perriello: Bob, how important is the right listing price in your market?
Bob Weber: Well, according to the MLS in Central Wisconsin, unit sales were down 25% from July ’07 to July ’08, but the average selling price was down only 2%-so we haven’t had to face some of the huge price declines that other regions have faced.
Our agents put great stock in doing a detailed market analysis for each seller and showing them true comparisons. We take a four-stage approach when it comes to taking a listing: we show up, we listen, we tell them the truth-and if they can’t live with our suggested list price, we walk away.
Pat Riley: We understand that selling your home is an emotional decision. Some will say, “My neighbor got X amount a year ago, and my home is so much nicer than theirs.” They are not realistic about competing homes in their region. So we just put our sellers in the car and take them around personally to see the competition for themselves.
Dan Joyner: We all know that thorough market analysis and neighborhood price comparisons are the only way to set the right listing price-especially as the market keeps shifting. In fact, the last two months have been very encouraging. If a home is reasonably priced and market-ready, we are beginning to witness multiple offers within the first few days of the listing-but the right listing price is essential.
BW: Absolutely. The fact is, there hasn’t been a better time in years to buy that first home-or a second or vacation home for that matter. More and more buyers are beginning to realize that, and I think sellers are realizing it as well. They understand they have to be realistic to take advantage of what’s happening today.
PR: There’s another issue we point out to our sellers-the nature of the swing. That is, any dollars they may give up on the sale of their home, they will likely make up on what they buy. It’s a moot point, so pricing the property right in the first place is a win-win situation.
AP: So as sellers in general become more realistic, sales will continue to improve?
DJ: Yes, and as that happens, and the good buys are being snapped up, the number of homes on the market will decrease. That is precisely the situation we need in order to get back on track.
BW: Which brings us back to point one. Our agents know we need to walk away from listings where the seller has no urgency to sell, because those are the homes that will simply clutter up the marketplace.
PR: We also need to focus our energy on buyers-because we know there are plenty of them out there, wanting to buy and buy now. The sooner we can help our sellers to realize that, the sooner the market will return to more normal levels.
The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Alex Perriello, NAR’s Special Liaison for Large Firm Relations. Watch for this column each month, where we address broker issues, concerns and milestones.