Ann Arbor area sellers know that selling a home has gotten more difficult, but many sellers, let alone agents, have been unable to quantify just how difficult. Perception being reality, it used to be that all you had to do was plant a sign in the yard and mystically the buyers would appear to purchase your home. Perception still being reality, it appears as though “For Sale” signs have sprung up like so many mushrooms.
Unfortunately for us, these “funghi” have yet to run their course. The question remains, “Why is it so difficult to sell a home these days?”
My broker recently sent out a very descriptive flyer ([download#4]) on the changing face of real estate in Michigan. Historically, we used to see the following as a breakdown of the yearly closed real estate transactions:
|Currently, the breakdown looks like the pie chart to the right: 50% of our business is now Bank Owned or Foreclosure transactions, 16% is Traditional Retail and Short Sales and a full 18% of the transactions are Leases.|
“Gee, thanks Todd! I knew things were rough, now I know the percentage that things are rough!”
It’s important for sellers, or soon to be sellers, in the current market to know EXACTLY what they are facing in this marketplace. We have been browbeaten into believing that nothing is selling and that the housing market is filled with nothing but doom and gloom.
While this post may fall into that same category in your mind, let me make it clear that this is simply the reality of the marketplace at the end of 2008. If you are in the position of having to sell your home right now, this is what you are facing.
Although traditional owner occupied homes make up a majority of the current homes available for sale, the majority of the homes being sold are bank owned or fi nancial hardship related sales. This puts downward pressure on values and causes pricing to take a more signifi cant roll in marketing.
It cannot be stressed enough: If you have a home with great quality and a price that is on par with the foreclosures and short sales in your area, your home will be the next one to sell. If not, you could be trying to sell until those distressed properties aren’t on the market anymore. The only “problem” with that strategy is that those homes will likely be used as comparables in any appraisal done on the sale of your home.
So, to catch a ball rolling down hill, which is easier:
- Run up behind the ball to catch it, or
- Get in front of the ball and let it whack you in the shins?
As our housing prices continue to decline you need to be in front of the curve to get your home sold first. Of course, couple that great price with a great marketing system and the game is over!