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HOT OR NOT
The Truth about What’s Going On in
Davis County’s Housing Market
The news reports show signs of a recovery and home prices increasing. Is this really what’s going on in the Davis County housing market? I recently was listing a homeowner’s home who had that same question. They had bought their home during the 2006 to 2007 housing boom when things were HOT. In fact, when they were looking for a home they bought before even putting their home in on the market. They then listed their home it sold in 30 days. Now after only two years they want to sell their home and everything has changed.
They’re hoping to sell their home for top dollar. They want to know what’s really going on in our market and what they have to do to get every dollar possible. Where is reality?
I am going to answer that question. It is not that simple of an answer, and it is very important for you if your money is on the line. Sooner or later we all have to look reality square in the eye if we actually plan on selling our homes.
So sit down… relax… turn off the television and grab yourself a warm cup of coffee or a cold soda and find your favorite easy chair. I want you to relax and have your eyes and ears open because this is going to be one of the most important reports you may ever read.
Remember not so long ago, when you could make your fortune in real estate. It was nothing then to buy a home, wait a short while, and then sell it at a tidy profit. And then do it all over again. Investors and house flippers bought homes and flipped them for big bucks. All the spec home builders were selling their homes before they were even finished. Builders were making $10,000 to $30,000 more if they waited to the end of construction before they sold because prices were going up so fast. Homebuyers were waiting in line to buy, and sending personal letters to homeowners who had a home for sale telling them how badly their family wanted their home. It seemed like everyone was buying at the same time. Well, as you probably know, times have changed.
So, what happened and why has everything seemed to have come sliding down. Well, when home builders, investors, developers and banks saw the buyer frenzy get started they all jumped in at once. Many lowered their standards and let down their guard. Home builders started building more spec homes than ever before and new builders were popping up chasing the next big thing. Banks lowered their lending standards and lent money to practically anyone who could fog a mirror. Investors bought everything they could get their hands on and don’t forget all the would-be house flippers looking to get rich. Developers built way too many new housing developments and communities.
They all made a fortune for a while until home sales started slowing down. But they could not stop because many new homes, developments and communities were halfway through construction and had to be finished. I’m sad to say it but it’s all caught up. Banks and lenders who lent money to home buyers with crazy rates are defaulting on their loans. They are unable to refinance their homes and get bailed out of trouble. Builders who overbuilt were stuck with multiple homes and discounting them just to unload them for a while. Developers over developed and then there was a flood of lots for sale. Many new subdivisions are still not completed. Investors and house flippers were freaking out and doing whatever they could to get rid of their homes. And still not everyone will sell and many builders, developers, banks and investors have gone belly up. The Out Of Business sign has become too familiar.
How does this affect you and your home sale?
The housing market is controlled by supply and demand. When demand is high and supply is low it’s a seller’s market and Seller’s are in control. That’s what happened between 2005 and 2007. Now the reverse is true. Supply is high and demand is low. We are in a buyer’s market. Buyers are making the rules and have become very discriminating with what home their money buys. It’s not uncommon to have a buyer look at a home and not like one thing and decide to buy a different one.
Although some areas and home price ranges are starting to see slight gains in price and inventory is still low, many continue to struggle. Home sales have continued to drop with a large oversupply of homes still on the market. In 2002 the number of single family homes sold was 2649 in Davis County. Then it rose to its peak of 4655 home sales in 2006 and has come sliding back down. Davis County ended the year with only 3025 home sales. Sales volume is returning to normal. So what’s the problem?
If sales volume returns to normal when will the market go back up?
The housing market will start to go back up when the housing inventory balances out. When will that be? Well right now we have only 1528 active homes for sale. Going back to what I told you in the first part of this letter the market is controlled by supply and demand. Most homes sales are happening in the $200,000 and under price range. In fact,homes $200,000 and under account for 75% of the market and homes price between $250,000 and $350,000 accounted for 15% of the market. If you add the two together meaning $350,000 and under it accounts for almost 90% of the market and the rest are left with 10% to find a buyer. This is based on sales from year end 2011. It’s a buyers market when there are eight months or greater of supply of homes. It’s a sellers market is defined as five months or less supply and a balanced market is between 5 to 7 months supply of homes.
Not all homes are affected by the current market. If your home is priced under $180,000 you’re in pretty good shape compared to the rest of the market. If your home is between $250,000 to $350,000 you need to be very serious and put all the odds in your favor. Pricing your home properly is critical and you need to constantly watch what’s going on in the market. Your home needs to be as appealing as possible with great curb appeal. Aggressive marketing to buyers is important and make sure every potential buyers is followed up with. If your home is over $350,000 you have to do everything right to put the odds in your favor and then you may still have some time to wait. To sell your home you need to be priced competitively and have a very appealing home.
Inventory is normalizing but there are still new homes entering the market and builders are starting to build again. Approximately 348 homes come on the market every month. In 2002 we had an average of 484 listings a month. Every month your home is on the market there is more competition. So what’s the solution? It’s pricing your home ahead of the curve and marketing aggressively to buyers. Making your home stand out of the crowd so buyers will want it. Staging it properly and having great curb appeal.
I have seen homeowners who want to sell their home but start overpriced, hoping buyers will pay them what they feel their home is worth. When they finally realize they aren’t going to get their asking price they lower the price. They would have been better off starting where it would sell right from the start. By this time the housing market often has declined and affected their sale price by $5,000 to $50,000. The median price history in Davis County has gone down from its peak of $220,000 in 2007 to $186,000 in 2011. That shows prices have fallen 16% on average. We have seen the effect. Now let’s talk about how you can avoid any more of this and get you home sold.
Pricing Ahead of the Curve—How to Get Ahead of the Market
What if your market is trending quickly down or quickly up? Can this affect your pricing strategy? Of course! In both cases you might miss an opportunity to sell your listings for top dollar by not keeping a careful eye on the market trends. For instance in 2005 and 2007 when the market was rapidly rising it was wise to closely evaluate not just the sold properties but to look very closely at the pending sale prices and the active listings. Based on this a savvy seller might want to consider pricing their home more aggressively knowing that if they are slightly above the market in a very short time the market will "catch up".
But now we are in reverse, a declining market? You might think of a declining real estate market like a stock market sell-off. In a bear stock market what tends to happen is that sellers chase the market down. In other words they keep agreeing to lower, and lower prices just to lock in what little profit they may have left. Believe it or not the same is often true in a bear real estate market. Sellers chase the market. First rushing to put their home on the market, thus causing a buildup of an inventory, and then slashing their price just to get their home sold.
This is a dangerous position for any seller. For instance in a declining market even if they price their home competitively within a few days or weeks their price maybe significantly over what more motivated sellers are asking for their homes. Take a look at how easy this can happen with Suzy the Homeowner.
Suzy would really like to sell her home in the next 60 days but of course she would wants to net as much money as possible from the sale. Studying her competition and relying on the advice of her real estate professional she lists her home for $345,000.
Based on this price let's take a look at Suzy's competitive position today:
So, How Can You Find The Market Value Of Your Home?
There are many ways to find the value of your home, from, an appraisal to a free Comparative Market Analysis from an agent. An appraisal may be a good way to find the value today but may become outdated quickly as I showed you above. You will still need to collect ongoing future information.
I know you are getting several calls and letters from agents wanting to give you a free Comparative Market Analyses or CMA as it’s called. The agent’s primary goal is to list your home. They are not successful until you have signed the Listing Agreement. Does this make them objective and compel them to put your interests as their highest priority? Not usually! Most agents will tell you what they think you want to hear. They will flatter you with a high price to make sure you will want to list your home with them. The problem is Buyers are not interested in flattering you. In fact quite the opposite, most will find all the faults they can and use them to negotiate a lower price (if they make an offer). When you list your home at an unrealistic price or do not deal with the issues affecting your home’s sale you only loose money in the long run.
We have made it easy for you to determine what’s going on in today’s market. I’ve discovered there are some pretty serious challenges facing homeowners selling their homes for the next few years. Since my survival depends upon your success, I wanted to make sure you saw this information and had every opportunity to be ahead of the problems. Contact me NOW while you are reading this. Because the truth about finding a good buyer for your home is… the early bird really does get the worm.
All the best,
Diane Allan, Realtor
801-390-0970
Coldwell Banker Residential Brokerage
P.S. Don’t wait another minute – this housing is complex and if you want to learn how to get ahead of your competition and get your home sold then contact me today at 801-390-0970.
P.P.S. Every day your home is sitting on the market unsold you will face more problems with getting it sold. I know that may sound harsh but it’s the truth. You need and aggressive plan if you are going to sell your home in this market. Don’t wait for your neighbor to get desperate and “give his home away” or wait until a home goes into foreclosure and wrecks your homes value forever. Contact me at 801-390-0970 to discover how you can get ahead of the game and get your home sold!
Davis County’s Housing Market
The news reports show signs of a recovery and home prices increasing. Is this really what’s going on in the Davis County housing market? I recently was listing a homeowner’s home who had that same question. They had bought their home during the 2006 to 2007 housing boom when things were HOT. In fact, when they were looking for a home they bought before even putting their home in on the market. They then listed their home it sold in 30 days. Now after only two years they want to sell their home and everything has changed.
They’re hoping to sell their home for top dollar. They want to know what’s really going on in our market and what they have to do to get every dollar possible. Where is reality?
I am going to answer that question. It is not that simple of an answer, and it is very important for you if your money is on the line. Sooner or later we all have to look reality square in the eye if we actually plan on selling our homes.
So sit down… relax… turn off the television and grab yourself a warm cup of coffee or a cold soda and find your favorite easy chair. I want you to relax and have your eyes and ears open because this is going to be one of the most important reports you may ever read.
Remember not so long ago, when you could make your fortune in real estate. It was nothing then to buy a home, wait a short while, and then sell it at a tidy profit. And then do it all over again. Investors and house flippers bought homes and flipped them for big bucks. All the spec home builders were selling their homes before they were even finished. Builders were making $10,000 to $30,000 more if they waited to the end of construction before they sold because prices were going up so fast. Homebuyers were waiting in line to buy, and sending personal letters to homeowners who had a home for sale telling them how badly their family wanted their home. It seemed like everyone was buying at the same time. Well, as you probably know, times have changed.
So, what happened and why has everything seemed to have come sliding down. Well, when home builders, investors, developers and banks saw the buyer frenzy get started they all jumped in at once. Many lowered their standards and let down their guard. Home builders started building more spec homes than ever before and new builders were popping up chasing the next big thing. Banks lowered their lending standards and lent money to practically anyone who could fog a mirror. Investors bought everything they could get their hands on and don’t forget all the would-be house flippers looking to get rich. Developers built way too many new housing developments and communities.
They all made a fortune for a while until home sales started slowing down. But they could not stop because many new homes, developments and communities were halfway through construction and had to be finished. I’m sad to say it but it’s all caught up. Banks and lenders who lent money to home buyers with crazy rates are defaulting on their loans. They are unable to refinance their homes and get bailed out of trouble. Builders who overbuilt were stuck with multiple homes and discounting them just to unload them for a while. Developers over developed and then there was a flood of lots for sale. Many new subdivisions are still not completed. Investors and house flippers were freaking out and doing whatever they could to get rid of their homes. And still not everyone will sell and many builders, developers, banks and investors have gone belly up. The Out Of Business sign has become too familiar.
How does this affect you and your home sale?
The housing market is controlled by supply and demand. When demand is high and supply is low it’s a seller’s market and Seller’s are in control. That’s what happened between 2005 and 2007. Now the reverse is true. Supply is high and demand is low. We are in a buyer’s market. Buyers are making the rules and have become very discriminating with what home their money buys. It’s not uncommon to have a buyer look at a home and not like one thing and decide to buy a different one.
Although some areas and home price ranges are starting to see slight gains in price and inventory is still low, many continue to struggle. Home sales have continued to drop with a large oversupply of homes still on the market. In 2002 the number of single family homes sold was 2649 in Davis County. Then it rose to its peak of 4655 home sales in 2006 and has come sliding back down. Davis County ended the year with only 3025 home sales. Sales volume is returning to normal. So what’s the problem?
If sales volume returns to normal when will the market go back up?
The housing market will start to go back up when the housing inventory balances out. When will that be? Well right now we have only 1528 active homes for sale. Going back to what I told you in the first part of this letter the market is controlled by supply and demand. Most homes sales are happening in the $200,000 and under price range. In fact,homes $200,000 and under account for 75% of the market and homes price between $250,000 and $350,000 accounted for 15% of the market. If you add the two together meaning $350,000 and under it accounts for almost 90% of the market and the rest are left with 10% to find a buyer. This is based on sales from year end 2011. It’s a buyers market when there are eight months or greater of supply of homes. It’s a sellers market is defined as five months or less supply and a balanced market is between 5 to 7 months supply of homes.
Not all homes are affected by the current market. If your home is priced under $180,000 you’re in pretty good shape compared to the rest of the market. If your home is between $250,000 to $350,000 you need to be very serious and put all the odds in your favor. Pricing your home properly is critical and you need to constantly watch what’s going on in the market. Your home needs to be as appealing as possible with great curb appeal. Aggressive marketing to buyers is important and make sure every potential buyers is followed up with. If your home is over $350,000 you have to do everything right to put the odds in your favor and then you may still have some time to wait. To sell your home you need to be priced competitively and have a very appealing home.
Inventory is normalizing but there are still new homes entering the market and builders are starting to build again. Approximately 348 homes come on the market every month. In 2002 we had an average of 484 listings a month. Every month your home is on the market there is more competition. So what’s the solution? It’s pricing your home ahead of the curve and marketing aggressively to buyers. Making your home stand out of the crowd so buyers will want it. Staging it properly and having great curb appeal.
I have seen homeowners who want to sell their home but start overpriced, hoping buyers will pay them what they feel their home is worth. When they finally realize they aren’t going to get their asking price they lower the price. They would have been better off starting where it would sell right from the start. By this time the housing market often has declined and affected their sale price by $5,000 to $50,000. The median price history in Davis County has gone down from its peak of $220,000 in 2007 to $186,000 in 2011. That shows prices have fallen 16% on average. We have seen the effect. Now let’s talk about how you can avoid any more of this and get you home sold.
Pricing Ahead of the Curve—How to Get Ahead of the Market
What if your market is trending quickly down or quickly up? Can this affect your pricing strategy? Of course! In both cases you might miss an opportunity to sell your listings for top dollar by not keeping a careful eye on the market trends. For instance in 2005 and 2007 when the market was rapidly rising it was wise to closely evaluate not just the sold properties but to look very closely at the pending sale prices and the active listings. Based on this a savvy seller might want to consider pricing their home more aggressively knowing that if they are slightly above the market in a very short time the market will "catch up".
But now we are in reverse, a declining market? You might think of a declining real estate market like a stock market sell-off. In a bear stock market what tends to happen is that sellers chase the market down. In other words they keep agreeing to lower, and lower prices just to lock in what little profit they may have left. Believe it or not the same is often true in a bear real estate market. Sellers chase the market. First rushing to put their home on the market, thus causing a buildup of an inventory, and then slashing their price just to get their home sold.
This is a dangerous position for any seller. For instance in a declining market even if they price their home competitively within a few days or weeks their price maybe significantly over what more motivated sellers are asking for their homes. Take a look at how easy this can happen with Suzy the Homeowner.
Suzy would really like to sell her home in the next 60 days but of course she would wants to net as much money as possible from the sale. Studying her competition and relying on the advice of her real estate professional she lists her home for $345,000.
Based on this price let's take a look at Suzy's competitive position today:
- Competitor Home A: $368,000
- Competitor Home B: $349,000
- Suzy's Home Today: $345,000
- Competitor Home C: $345,000
- Competitor Home D: $333,000
- Competitor Home E: $329,000
- Competitor Home A: Expired
- Suzy's Home Today: $345,000
- Competitor Home B: $339,000 (Reduced Price)
- Competitor Home C: $335,000 (Reduced Price)
- Competitor Home D: Sold
- Competitor Home E: Pending
- Competitor Home F: $326,000 (New Listing)
- Competitor Home G: $325,000 (New Listing)
- Competitor Home H: $319,000 (New Listing)
So, How Can You Find The Market Value Of Your Home?
There are many ways to find the value of your home, from, an appraisal to a free Comparative Market Analysis from an agent. An appraisal may be a good way to find the value today but may become outdated quickly as I showed you above. You will still need to collect ongoing future information.
I know you are getting several calls and letters from agents wanting to give you a free Comparative Market Analyses or CMA as it’s called. The agent’s primary goal is to list your home. They are not successful until you have signed the Listing Agreement. Does this make them objective and compel them to put your interests as their highest priority? Not usually! Most agents will tell you what they think you want to hear. They will flatter you with a high price to make sure you will want to list your home with them. The problem is Buyers are not interested in flattering you. In fact quite the opposite, most will find all the faults they can and use them to negotiate a lower price (if they make an offer). When you list your home at an unrealistic price or do not deal with the issues affecting your home’s sale you only loose money in the long run.
We have made it easy for you to determine what’s going on in today’s market. I’ve discovered there are some pretty serious challenges facing homeowners selling their homes for the next few years. Since my survival depends upon your success, I wanted to make sure you saw this information and had every opportunity to be ahead of the problems. Contact me NOW while you are reading this. Because the truth about finding a good buyer for your home is… the early bird really does get the worm.
All the best,
Diane Allan, Realtor
801-390-0970
Coldwell Banker Residential Brokerage
P.S. Don’t wait another minute – this housing is complex and if you want to learn how to get ahead of your competition and get your home sold then contact me today at 801-390-0970.
P.P.S. Every day your home is sitting on the market unsold you will face more problems with getting it sold. I know that may sound harsh but it’s the truth. You need and aggressive plan if you are going to sell your home in this market. Don’t wait for your neighbor to get desperate and “give his home away” or wait until a home goes into foreclosure and wrecks your homes value forever. Contact me at 801-390-0970 to discover how you can get ahead of the game and get your home sold!