Market Trends

How’s the Market?

I was pleasantly surprised after completing a market survey as of July 31, 2008. The average sales price in the 20 or so Upper Valley communities that we look at has actually gone up 6% as compared to the same time period in 2007. Also, the median sales price, a much more realistic number has also gone up 13%. The time it takes to sell a home is continuing to rise resulting in an increase in inventory however that seems to be easing as the number of single family residential homes sold is up 7%.

This seems like really good news so why does everyone have such a pessimistic attitude regarding the real estate market? One reason is the public including the media tends to focus on unsold homes and the state of the real estate market in other parts of the country.

Unsold Homes: Frankly a lot of sellers have priced their homes far beyond what buyer’s are willing or even capable of paying. It’s very possible that some of these homes would have never sold for there current asking prices even if we had the same real estate market conditions we enjoyed back in 2005. One explanation for prices being so high was the huge number of folks who refinanced their low mortgages over the past few years trying to capitalize on the increase in their homes value, many financing 100 or even 125% of the appraised value. Unfortunately, the appraisal given at the time they refinanced may have been overly optimistic. Without an actual buyer with cash in hand, there was no true gauge of their homes value. Home owners had no problem with these values increasing beyond what some even thought was realistic at the time but seem to find it impossible for their homes to go down now.

Out side Market Conditions: It’s true; there are parts of the country that have been hit hard with over building and poor lending practices. Florida, Nevada, California and Ohio have seen huge losses in their homes values. Poor economic conditions combined with poor lending practices in these areas are feeding upon themselves. People who never should have received a mortgage in the first place are now feeling the pressure. Adjustable or teaser rates are now increasing the monthly payments, combined with inflation many are finding it impossible to make their payments. Faced with feeding their families or making a house payment some of these people are just walking away from their homes. Creating an unprecedented number of foreclosures which sell at rock bottom prices continuing to feed the flames of a falling market.

What does all this mean and how does this help me sell my home in the Upper Valley?

While a 6% gain is impressive it isn't enough to counter the losses we sustained in 2006 and 2007 combined with high inventory and inflation. Sellers need to take the following steps if they want to sell this year.

1. Realistically price your home. Always get 3 Realtors price opinions and toss out that appraisal you got back in 2005 its yesterdays news. If you don't really need to move than consider withdrawing your home from the market until there is a more favorable selling environment.
    
2. Location, location, location. With high inventory, homes that have less than good locations, busy roads or address that starts with "Sewer Treatment Lane" are going to be much harder to sell. You'll have to be priced under value to compete, as there will always be a similarly priced home in a better location.
    
3. Keep your home clean and well maintained. Since there are too many homes to choose from the ones that look there very best we'll be perceived to show the most value.
    
4. Finally, List your home with REMAX Upper Valley! "Yes, a self serving plug, it is my blog after all!"
    

For a FREE market opinion of your home email freecma@uvmaxre.com or give us a call at 603-298-8900.

Gerry Stark Principal Broker (603) 298-8900

RE/MAX Upper Valley Partners

(800) 925-9310