Sellers On Ice
NYTimes.com spots a big chill on the horizon for sellers....
"Many Americans who planned on real estate as their path to wealth are beginning to find that there are limits to how high is up."
"Blame market forces. As higher interest rates dampen demand in cities and suburbs that only a year ago were battlegrounds for fierce bidding wars among numerous buyers, sellers are grudgingly lowering their prices to drum up interest."
Look what's going on with our neighbors over in Marin...
"A house at 57 Marina Boulevard in San Rafael, across the bay from San Francisco, was originally listed at $1.45 million. The owner recently dropped the price to $949,000 when a competing house on the same street lowered its price to $959,000, from $989,000."
"In Marin County, the prices of about a quarter of all listings have been reduced. County records show that 57 Marina Boulevard was sold in February for $700,000, so the owner, Dan Marr, is unlikely to lose money even at the lower price, though he may not make as much as he had hoped. "I don't want to talk about it," he said."
"It is getting tough out there for sellers. What is happening in Marin County is being repeated in cities and suburbs across the United States."
"It is a slow leak, to be sure. The most widely used statistic to measure home values, the median home price, shows that once-hot markets like San Mateo, Calif., and Mercer County, N.J., are now registering year-over-year declines."
'"It's going from a seller's market to a buyer's market," said David Lereah, the chief economist for the National Association of Realtors. In March, "price appreciation went down to 7.4 percent, from over 10 percent," he added. "That most probably reflects that sellers are bringing their prices down."'
Well, its not a buyers market yet David... but a couple years of giving back phony price inflations and it will be.
"ZipRealty, the discount real estate broker, has found widespread price reductions in the multiple listing services used by all agents to advertise homes. Prices have been trimmed on 35.7 percent of all homes currently listed for sale in the Boston area, for example. The same is true for homes in San Diego, Sacramento, Los Angeles and Miami. And prices have been snipped on a quarter of the homes in Chicago, Washington and Baltimore."
"In Silicon Valley, where jobs are coming back after the collapse of the technology bubble, Richard Calhoun, a real estate agent, said that the number of homes sold was now 85 percent of the 25-year average. A year ago, it was 30 percent above that average. In Santa Cruz, inventories have tripled to 124 days, from 42 days."
"Elsewhere, for the first time in nearly a decade, you can smell the anxiety. The listing agent for a four-bedroom home on Scripps Trail in San Diego informed other agents in the multiple-listing service that a "very, very motivated seller will entertain all reasonable offers" and "will help with closing costs."'
"The house was listed in September at $810,000. After a previous price cut, the seller is now willing to entertain offers as low as $685,000. The seller bought the house for $730,000 in 2005, according to county property records, for what the listing agent said were investment purposes."
"PMI, a company that tracks risk in the real estate market for mortgage lenders, said the chances were increasing that prices in San Diego would decline in the next two years. The company said the city had a 60 percent chance of a decline, up from 52.8 percent last summer.
Prices in most of California and the Boston-to-New York corridor could also fall, said Mark Milner, the company's chief risk officer."
"Robin L. McCarthy, a real estate agent who works in nearby Princeton, N.J., said homes were sitting on the market three to four months, when houses sold in as little as a few days a year ago. Houses that would have been the subject of intense bidding wars now sell for slightly less than asking price."
'"Buyers are afraid that real estate prices are going to go down, so they are very careful," Ms. McCarthy said. "They don't want to pay too much."'
"Nationally, the Commerce Department reported that median new-home prices — half the homes sold for more, half for less — fell 2.2 percent, to $224,200, in March from a year ago. It was the first year-over-year price decline since February 2003."