Sliding prices have sellers whining

By Melissa Wirkus

Prices continue to drop throughout the entire United States, with no end in sight anywhere in the near future.

Buyers continue to sit on the sidelines waiting for prices to drop further, advancing the progress of our floundering market.

Sellers are continually forced to drop their prices as they watch their neighbor’s house sell only after a drastic price reduction.
An October 26, 2006 article by Noelle Knox of USA Today, “Sellers sing the blues as price drop sets record,” looks into how the national median home price seems to be slipping down further and further every month.

Homes that used to sell in a matter of days with little or no effort on behalf of the seller or their agent are now sitting for months on the market.

It seems the only thing that will get a house sold these days is to lower the price, which is something that many homeowners are not willing to do.

“The median price for a single-family home slipped 2.5% from September last year to $219,800, the sharpest annual drop since the NAR began tracking the data in 1969. The median-priced condominium fell 2.8% to $219,800, the fourth annual decline in a row. At the same time, the volume of home sales fell for the sixth straight month, tumbling 14% in September compared with a year ago.”

The majority of today’s markets are indeed that truly fit for the buyer. A buyer’s market is defined as any area that has more than a six-month supply of homes.

“But it's clearly a buyer's market now. The number of homes for sale has bulged to a 7.3-month supply compared with 4.6 months last September. The backlog of homes for sale is thickest in the areas that witnessed the fastest price growth and investor activity.”

In a buyer’s market, the buyer is at a great advantage since there is not only a surplus of homes to choose from, but they are bound to get a good deal somewhere from a seller desperate to unload there home.

“In the softest real estate markets, sellers are waking up to the harsh reality that they can't get anywhere near what their neighbors sold their homes for last year. So they're grudgingly reducing their asking prices and offering to pay closing costs. At the same time, many buyers, emboldened by the transformed market, are low-balling sellers and getting deals they couldn't have imagined last year.”

In fact, this notion is causing many sellers to think twice about selling their home, and they are either pulling their home from the market or holding off all together until the market starts to heat up again.

According to a USA Today/Gallop poll conducted earlier this month, about half of American homeowners who considered putting their home on the market in the past year have actually delayed selling their home.

“‘It was surprising just how quickly the market seemed to turn,’ says Mark Zandi, chief economist for Economy.com. ‘It was like, boom, boom, bust. It was like, 'What happened?' The psychology in the marketplace unraveled very rapidly.’”

In the midst of all of the turmoil with individual sellers comes competition from big homebuilders, who have no problem cutting their prices. So now, in the slowing market, sellers will not only have to compete with one another but also with home building companies who can actually afford a huge price cut. Good luck sellers!

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