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Selling for A Strong Price in Raleigh

Saturday, July 23rd, 2011 | 0 comments

The New Standard for a House that will Sell for a Strong Price

 When you sell a house, there are a few things you cannot change—the location and floorplan.  You can enhance them, but you really cannot change them. 

Also, the seller cannot change the market conditions—the number of motivated buyers out there shopping or the number of homes on the market; in other words, supply and demand.  The market demand is fixed; it is out of the seller’s control.

 But the seller can do something about the condition of their home.  They can control how they present their home to buyers.  They have a product to sell—and they choose, ‘do I put it on the highlighted isle-display at Macy’s or stuff it into a mish-mashed pile in the back corner?’  In our boom market, anything you put out on the floor sold.  But we are a long way from that kind of market or that kind of growth in our national economy. 

So here is my idea on the new standard for a house that will sell for a strong price in our slow growth markets.  You have to catch the eye of the buyer and convince them your house is their most appealing opportunity.

First, ensure it is in solid condition.  Make it repair ready so the buyer is confident they are buying a solid house that is a safe investment.  The vast majority of buyers prioritize ‘move in ready.’  They will spend more money if they are not concerned about their risk. 

Second, add irresistible improvements.  Be creative without spending much.  Add the touches that are most attractive and desired by the buyers that will look at your home—all on a cost effective and limited budged.  But be careful here so you don’t overbuild it—don’t way overdue your neighbors or your competition.  Make sure you get quality advice before picking your projects. 

Third, attractively present your home. 

  • Make it organized so people can see the best qualities of your home.
  • Make it clean so you put a shine on all your valuable features.
  • Set it up and stage it so you enhance your home’s ideal uses.  Spotlight its virtues.    
  • And then advertise it on the internet with a glow—use pictures that make people want to see the house for themselves. 
  • In your advertisements, tell people the story of the house—how it is a distinct home that offers distinctive virtues and opportunities. 

Finally, price it right.  Make it competitive.  Send the message to the buyer that this house is for sale and they need to buy it now.  Currently, a home priced right sells at 98% of original list price.  Those with price drops sold at 83% of original list price, on average.  Spare yourself trouble and try to price it competitively in the beginning. 

For more information and some great links with concrete ideas and pictures, see our ‘seller guide’

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Where are prices still falling?

Saturday, May 14th, 2011 | 0 comments

Here is my basic answer: those most inflated by the bubble still need more correction. And the primary sign for falling values is high inventory. To catch the eye of the few buyers ready to make a commitment, homes have to dress themselves up and offer lower prices

Let me highlight three kinds of housing affected by the bubble whose values will likely deflate more. These include: Particular price ranges, particular locations, and particular kinds of properties

First, The bubble inflated some price ranges way beyond normal demand. As the bubble deflates, people are making more conservative choices and this leaves the upper price ranges with high inventories that sit relatively stagnant.

  1. In Cary: this affects homes over 500k
  2. In N Raleigh, Apex/ Holy Springs: over 350k
  3. In Wake Forest: over 250k
  4. In Raleigh, Knightdale and Garner: over 200k
  5. These upper price ranges will still have to drop prices to clear out inventories.

Second, The bubble motivated a wave of growth outside the city which far outpaced normal growth. As the bubble deflates, it leaves an over abundance of homes on the edges of town.

  1. To the North: this affects parts of Wake Forest and beyond
  2. To the East: this affects NE Raleigh, Knightdale and Zebulon
  3. To the South: this affects South Garner and Fuquay Varina

Third, The bubble excited demand among some properties that are not nearly as attractive now.

During a bubble in demand, people overlook reasonable defects. They may overlook Functional problems—like difficult floorplans, steep driveways, tiny yards, or backing to major roads. They may overlook repair problems—like worn out flooring, rotten siding, or old wiring. So homes with reasonable deficiencies may need further prices drops.

Also, during a bubble in demand, people pay high prices from builders in popular neighborhoods. People rush to buy before the builder raises the price again. This is especially true in large neighborhoods with similar homes. But, after the project finished and our bubble busted, several homes compete for one sale. The one that paid 240k has to drastically cut their price to compete with the person that bought for 200k and were willing to sell for 210k

This is a painful problem in most towns. According to TARR. Areas in Briar Creek and Mingo Creek in Knightdale are down 13% this past year. Bowling Green in WF is down 7%. Stone Ridge in NE Raleigh is down 6%. Bedford in N Raleigh and Cameron Pond in Cary are down 5 %. And if prices are dropping like that, they are not done. So neighborhoods with high inventories and similar homes may continue to slash their prices

Finally, When demand is high and people easily sell their homes for strong prices, they don’t go into foreclosure. But when prices drop, decent quality foreclosures go up. Although Resales may not need to match foreclosure prices, increasing foreclosures in NE, E, and SE Raleigh are likely to erode prices for those that have to compete to attract the same buyers.

Many of the kinds of troubled housing I have mentioned have already seen deep cuts. But, if inventories are still high, they still need further cuts. My advice for those in trouble: do the best you can, learn some good lessons, and move forward. Fortunately, wisdom is more valuable than money.

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