Selling in a soft market
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KAI RYSSDAL: Some refreshing news for home sellers this week. The number of pending sales inched slightly upwards in June. That means more people signed contracts to buy new houses. But from Miami to Detroit to parts of California, sellers are starting to get a little uptight. Markets are slackening. Prices are falling. So people may be signing those contracts, but they’re not paying what they used to. And now some sellers are wondering what they gotta do to get anyone to pay at all. Our reporter Janet Babin knows what it’s like.
JANET BABIN: I own an historic five-bedroom home on a quiet street, about 10 minutes from downtown Cleveland. I’ve spent thousands restoring the house — tri-color paint job, new brick front steps, and refurbished redwood floor boards on the 30-foot side porch.
Problem is, no one’s lived in the house since last October, when I moved to another city and put it up for sale.
So this is pretty much how I start everyday now:
[“You may start your message now”
BABIN: Hi Denise..it’s Janet Babin…just calling to see if you’ve heard anything more about the house…” ]
Denise is my realtor. She’s doing all she can, but still, my center hall colonial sits vacant.
For Sale signs are cropping up like mushrooms in an oversaturated lawn. My former colleague Dave Pignanelli tried to sell for a year.
DAVE PIGNANELLI: “I initially put it on the market at $139,900 and dropped it down to $135, then down to $130, $129, $125 and then took it off.”
He’s staying put but now commutes more than two hours to a new job.
The National Association of Realtors says home prices are plummeting in the Midwest and South, and flattening out in the West. Sales of existing homes nationwide are down almost 9 percent from last year.
Higher interest rates and a pullback in speculative buyers have boosted the number of homes on the market. And, in some areas, like Cleveland, a softer economy means fewer people to buy homes. Richard DeKaser is chief economist at National City Corporation.
RICHARD DEKASER: “There are markets in many parts of the Midwest, where economic growth has been so slow as to not provide the kind of demographically driven demand for housing.”
So panicky sellers like me need help from the experts, and there are plenty out there, from blogs, to books and TV shows.
Cable television spawned a cottage industry of home shows, like Designed To Sell on HGTV. I confess, my husband and I watch religiously. HGTV’s Real Estate expert Terry Haas runs me by the home selling basics: no clutter, no bad smells, no odd decorating.
TERRY HAAS: “When you walk inside everything makes a difference. You want to make sure that home looks inviting.”
Did I mention my new granite counter top, newer hardwood floors, and refurbished bathrooms?
TERRY HAAS: “”Maybe you need to pay closing costs this time. Maybe you need to throw in homeowner’s fees.”
Haas says in a downturn, a real estate agent is essential. But Glen Wallace thinks his dogs might say otherwise.
GLEN WALLACE (with DOGS): “Can you bark for my Hamish?” Bark! “Tessie give me a kiss….gimmie a kiss….”
Wallace’s dog Tess gave him the idea to start his discount real estate company, My Dog Tess, in 2002. Back then, he used to quip that selling real estate was so easy even Tess could do it.
But in a buyer’s market? Wallace says sellers need to get more creative. Start a blog about the house, or homes in your neighborhood, or at least read them.
GLEN WALLACE: “I read realestatedecline.com everyday. Similarly, the Internet has opened up information sources for so many sellers for comparable sales, historical sales in their own neighborhood simply by going to their county Web site and pulling up the information.”
Wallace counsels to save money and skip the realtor, but price the house 5 to 10 percent below what neighbors are selling for.
He may have something there.
In the middle of writing this story, after 10 months on the market, I got my first offer: $59,000 lower than my first asking price and $19,000 dollars below my current list price.
In Durham, North Caroline, I’m Janet Babin for Marketplace Money.