New technology creates data that are tough to refute.
Persuading sellers to be realistic is a consistent challenge for any real estate agent, especially in a slowing or a declining market. Recent technological innovations make this much easier than ever before.
When properties have comparable amenities, it's easy to demonstrate that the lower-priced listings usually sell more quickly.
A company called ScatterGramPricing.com has now automated the pricing-line process. Agents simply enter the sales data and the computer generates the charts. The company also offers a true scattergram (a graph that allows you to plot the relationship between two different variables as a straight line.) While there are a number of statistical programs that do this, this particular program is designed specifically for the real estate industry. Agents enter the data and the computer does the rest. The most relevant chart to plot is the relationship between square footage and price. This is another way to help sellers be more realistic about pricing because you can visually demonstrate where their property falls as compared to the competition. Typically, the lower the price per square foot that a property is, the more quickly it will sell.
Another approach in helping sellers to be more realistic works best after you have taken the listing. This approach involves tracking how many visitors or hits that you are receiving from various Web sites where your listing appears. Until recently these data were expensive and hard to obtain.
AliceDonahue.com and Texasgulfcoastonline.com have tools to show you CMAs and Traffic patterns for this type of information for the entire Texas Gulf Coast region.
Speaking of overpriced listings, Housing Giants
recently revealed their 2008 Housing forecast for homebuilders.
|According to Curry, there are just more than 5 million homes for sale in the united states, about the same number of housing units in illinois. so to visualize the devastation across the country: imagine a "for sale" sign in front of every single-family home, every townhouse, every condo, every multi-family residential building in the entire state.
It's a horrifying thought, but now imagine this: every single home in the greater Detroit metro area is sitting empty because everyone has moved away. The 2.08 million households in the Motor City, including areas such as Ann Arbor and Flint, equate in number to the 2.07 million vacant homes for sale across the United States, according to data from the U.S. Census Bureau and the National Association of Realtors.
The length and depth of this correction, say experts at Harvard University's Joint Center for Housing Studies, will depend on the course of employment growth, interest rates, as well as the speed with which builders pare down excess supply.
Builders are already chipping away on their end by offering deep discounts and price reductions on the homes they have already built, as well as by decreasing housing starts. By the end of 2006, housing starts had dropped to 1.8 million, which is the lowest they had been since before 2003. For 2007, housing starts fell to a seasonally adjusted annual rate of 1.19 million units, the slowest since March 1993's pace of 1.08 million units, reports the NAHB. Single-family production registered a 1.7 percent decline to a 963,000-unit rate. Starts will continue to decrease in most U.S. regions in 2008 and then begin upward by third quarter 2008 and first quarter 2009, according to NAHB.
"Builders are working their problems down," says James Haughey, chief economist for Reed Construction Data. He adds, however, that it takes more than slowing housing starts to reverse the downturn in the U.S. housing market. Dropped housing prices are another way in which builders are playing a part to change the downward spiral of the housing market.
Whether it's homes, oil or even Beanie Babies, prices rise on items when demand exceeds supply and prices fall when supply exceeds demand. Given the increase in housing starts of the last few years outpaced the demand, it's no wonder home prices are declining. NAR figures show the national median existing-home price for all housing types was $211,700 in September, down 4.2 percent from September 2006 when the median was $220,900.
The problem with the dropped prices, however, is that buyers are playing a waiting game. They are hoping if they buy later rather than sooner, prices will drop even further. Learn More
2008 HOUSING STARTS
HOUSING STARTS WILL MODESTLY GROW
- We used NAHB data of single-family housing starts to calculate the percentage change from the actual 2007 starts to predicted 2008.
HOME PRICES EXPECTED TO RISE — BARELY
- Housing starts have dropped nationally from 1.8 billion units in 2006 to a newly projected 1.36 million for year-end 2007, according to NAHB data. For 2008, it is projecting an 11.9 year-over-year decline in starts for 1.2 million units.
VACANCY RATES STEADY
- The national median existing single-family home price was $223,800 in the second quarter of 2007, down 1.5 percent from the second quarter of 2006 when the median price was $227,100. They are expected to inch back up in 2008, but just a mere 1.2 percent, according to an NAR forecast.
MORTGAGE GLOOM — AND RATES — TO RISE
- The 2.7 percent national vacancy rate for homeowner housing in third quarter 2007 was higher than a year prior, which was 2.5 percent, but was not statistically different than the rate second quarter 2007 (2.6 percent), the U.S. Census Bureau announced in October.
HOMEOWNERS OF THE FUTURE
- Mortgage lenders will be tightening their purse strings further come 2008 to reverse the damage the recent rise in non-prime lending and the proliferation of alternative mortgage products caused.
- Mortgage production, already down about 15 percent to $2.31 trillion in 2007 from $2.73 trillion in 2006, will decline another 18 percent in 2008 as both purchase and refinance originations drop, according to data from the Mortgage Bankers Association.
MATERIALS PRICES WILL LIKELY FALL BEFORE CREEPING BACK UP
- The third quarter 2007 home ownership rate of 50.1 percent for Hispanic homeowners is the highest it has ever been, even though the increase was not statistically different from last year's rate of 49.7 percent, according to Census numbers. At the start of 2004, the rate was around 47.3 percent.
- Home building and remodeling account for two-thirds of domestic lumber consumption, according to NAHB. As housing starts drop — thus creating an increase in inventory of building supplies — it's no surprise that prices for some major home building materials have also continued to fall. In 2008, smaller price drops are likely before they creep back up, but at a slower pace.