Tranzon Auction Properties - Real Estate Auction Blog

The old adage that hope springs eternal is never more true than this time of year in the Real Estate Market. There is generally a buzz at every cocktail party and networking event; “I think they market’s improving”, “I’m seeing signs of increased buyer activity”, etc…

The overall question this season is - How will inventory levels affect pricing this season? There has been a roving buzz within the real estate community that we might see a rush of homes return to market this Spring from sellers who listed in late ‘05 & ‘06 hoping to capture the tail end of the appreciation. Unfortunately for them (and really everyone in general) their price expectations were way out of line with buyer appetite and many over-priced homes stagnated on the market only to be withdranw in late ‘06.

A year over year analysis of Portland, Maine shows:

Time Period Homes Withdrawn or Expired

9/1/04 - 12/31/04 59

9/1/05 - 12/31/05 115

9/1/06 - 12/31/06 229

This is a cursory look and I’m sure if we wanted to dig further we could explain away some of this increase by simply looking at the levels of inventory available during these time periods. Nonetheless, it is hard to dispute that fact that there were 100% more homes removed from the market in ‘06 and ‘05 than the preceding years. Now some of these homes were probably offered for sale simply hoping to capture a huge return on a single-family home investment and many sellers really did not need to sell, they just wanted to see if they could put enough in the bank to retire a few years early… Those homes may or may not return to market this spring. However, some of the sellers who decided to withdraw from market will eventually need to sell…maybe they can wait 6 months, maybe a year, but exactly how long is specific to each individual situation.

So, what do you do if you’re in a position to need to sell? You’re a developer with a balloon due in June. You’re a homeowner carrying two mortgage payments. You’re a just ready to move on. Unfortunately, right now, it’s all about Price. You have to establish a price on your home that sets you apart from your competition, but doesn’t leave money on the table. Where is that price? The short answer is no one is every really sure. Price too low and you’ve undersold your product, too high and buyers will scoff at you and move on to the next property. There are strategies and sales tools available that eliminate a lot of the guess work from this process. Feel free to give us a call if you’re interested in learning more.