I have been pretty insistent here that folks sitting on a primary home that has appreciated over time should consider taking what the market will bear now rather than holding out for the last dollar (if their plan is to move south). My logic is that if your house is losing, say, 6% of its market value per year, and you've had your eye on a house in a southern market that is flat or maybe slightly down, waiting is a foolish economy. The price you will get for your primary house will continue to fall proportionately faster than the one you want to buy next (or in a best case, will appreciate more slowly than the dream house). The spread will widen over just a few years, and you will be mired in your own private little inflation drama.
If you want to see a nice representation of this conundrum, check out Macromarkets.com, which displays an interactive map of housing prices in a few major cities around the country (the information is courtesy of the S&P/Case-Shiller Index, which tracks home prices across the nation). Click on the appropriate city on the map and Macromarkets displays a graph of housing prices over a 10-year span. I clicked on New York and Boston and then followed with Charlotte. The results were essentially as I expected; New York down over the last year, Boston down generally over the last few years, and Charlotte a straight line up over the decade. Atlanta is up as well, although more modestly.
Trust the numbers.
There is a direct relationship between the price of a home and the time it takes to sell. Elaine vonCannon, a member of our HomeOnTheCourse network of real estate experts, reports from Williamsburg, VA, that homes priced under $335,000 are selling within six months. Those in the range of $335,000 to $499,000 take between six and 10 months to sell, and those over $500K are on the market from nine to 18 months.
There appears as well a direct relationship between price and expectations among buyers.
"Over $335,000, the buyers are picky," says vonCannon, "and need move-in condition, and closing costs, a point on interest -ate buy down and a home warranty."
In Mt. Pleasant, SC, another HomeOnTheCourse real estate network agent Bob Crawford says the larger construction companies are offering "large incentives to sell existing inventory."
"We are pretty much like many other destinations for seniors," says Crawford, "as home and condo prices have dropped and inventory is high."
Both vonCannon and Crawford indicate that the inability of people up north to sell their homes is the major reason why the local markets' inventories are growing. We predict that discounts and other incentives from major builders will grow even more over the next year, putting increasingly greater pressure on mom and pop homeowners to lower their own prices. It is hard to see the cycle reversing for at least another 18 months. Of course, that makes anyone with cash in the best negotiating position.
If you are considering a home in Williamsburg or Mt. Pleasant, contact us by clicking on the button at the top of the column and we will be happy to put you in touch with Elaine or Bob. Have another location in mind? We will connect you with a top real estate expert who knows the golf course communities in their area. This will give you one-stop shopping ability rather than have to rely on the sometimes over-hyped pitches of the communities themselves.
Editor's note: I am off for parents weekend at my son's college in Virginia, so I may be offline for a few days. (No internet connection where I am staying, and internet cafes are few and far between in the Shenandoah Valley.) I will reconvene here late on Monday. Regards.
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