Do sellers really know just how bad the market really is in Central Florida? I have to believe that they don’t, based on my recent phone conversations and listing interviews with potential home sellers. There is only a slight chance that their home will sell at an average price, yet most home sellers still are demanding higher prices still. If they go ahead and list at the higher price, they’ll most likely have to reduce and sell for a much lower price in the end. Buyers, afraid that prices may still fall, are proactively seeking out homes which are great deals.
There is currently a 28 month supply of listings on the market in our M.L.S., (Orange, Lake, Seminole and Osceola counties), over 28,000 available listings which doesn’t include new home builder inventory or For Sale By Owners. If we added those together we’d have somewhere close to 40,000 available homes for buyers. Over the past few months in this same area, only 1,000 or so are selling each month. Sales in September were down 53.6 percent compared to September 2006. With roughly 4% of the M.L.S. inventory selling each month, what is happening to the rest of these listings? They are reducing their prices.
Are the real estates properly coaching the sellers on pricing? I’m not so sure. I mention the bleak statistics to potential sellers, yet I’m sure, what I’m saying is not quite sinking in because they always seem to want more than my recommended price. The fact is, if they really need to sell, they will have to price less than anyone in the area, be in the best possible condition and offer great terms. I’ve been through a down market before as a Realtor, I’m familiar with fierce competition and what it takes to get a home sold in this climate.
Are we at the bottom of the cycle? I can’t be quite sure, but for the first time in months, the Orlando Association of Realtors reports that the inventory did not raise this past September, however the decrease was small. Only 3 less homes listed. In preceding months inventory was growing each month. More listings were taken and less were selling.
Also troubling, is the fact that the average price differential is 93 percent. That is. A home which is listed for $250,000 should expect an average discounted price to be about $232,000. We as agents need to coach our would-be sellers who are thinking about listing their homes to not do so, so that this unprecedented over-inventory will decrease. Certainly there are more sellers who have their home on the market currently, who really need to sell. I realize that there are currently a great deal of sellers who purchased during the peak of the sellers market, who now must sell.
Many people of them cannot afford to list lower than what they’ve paid. Some have taken their homes off the market and placed them for rent, usually not covering their monthly expenses. I speak to many home owners that are now in this predicament. Still some of these people have their homes on the market. When I look at most of the larger subdivisions and their inventories in the M.L.S., I see a bunch of homes sitting on the market. A number of homes, which are approximately the same size as the higher priced listings, are offered for much less. Do the sellers not realize the competition? They must be complaining to their listing agents,
“My house wasn’t shown to any buyers in over 2 months!”
Some sellers who fail to sell with one agent will go ahead and re-list with a new agent. As a top selling agent in my area, I tend to list a lot of these previously listed properties. The sellers always seem to be very unhappy with their previous agent. Most times, the price was the reason that their home failed to sell. The agent wasn’t responsible, less you consider negligence on the pricing consultations. Many who list refuse to lower their price to keep up with the declining market around them. They will blame the inactivity received on their house on their agent. If the agent didn’t coach them regarding the pricing decreases around them while their home was listed, or if he failed to take the listing at the correct price in the first place, he is certainly to blame and should be yelled at.
If you don’t have to sell, don’t. If you must sell, sell at a competitive price. Don’t waste any precious time testing the market, you will surely fail. If you must sell, be sure to set a competitive price and be certain to insist that your agent consult with you on a weekly basis to check the pricing regularly. A lot of the listings priced too high are undoubtedly the outcome of listing agents and sellers not keeping tabs on the declining prices around them.