This widespread problem, where sellers think they "deserve" a price because that's what a neighbor got last year, or that they're at their "rock-bottom" price because that's their break-even number, well, got some bad news.
Pricing is a function of what the market will bear at any given time folks. Not what you "deserve", not what you "need to get". Here's a report from in-full-meltdown-mode Chicago:
It's pretty amazing how fast the reversal has occurred since last year," said David Stiff, chief economist at Fiserv CSW, a property-data analysis firm in Boston."There has never been such a quick deceleration in price appreciation," Stiff said. "I was looking at data from 1969 forward, and it's unprecedented."
Not so, said Tommy Gentile, who has been trying to sell his five-bedroom home in west suburban Montgomery for about six months. He has reduced the price by $20,000, to about $380,000, leaving little wiggle room.
"That price is pretty close to rock-bottom, as far as money we've put into it," he said of the house, bought two years ago. "We have to get our money back because we've bought another house, and we're remodeling that one. We have two mortgages.
"Few people are coming to take a look" Gentile said. Between competition from home builders offering incentives to close out developments and about 10 neighbors who also have their homes for sale, it's a struggle to attract interest.
September 30, 2006
Ah, the financial stupidity of home sellers: Thinking their price has anything to do with what they paid or what they need
Posted by blogger at 9/30/2006