Selling Your Palm Coast Real Estate or Just Listing it?
How long can sellers bury their heads in the sand before they have to come up for air?
Palm Coast, FL – June 3, 2008 – It’s said that sellers are the last ones to know the market has dropped. By most measures, the Palm Coast, Flagler County housing market peaked in the summer of 2005. Yet, 2½ years later, some sellers still haven’t gotten the message. How can that be? It’s certainly not because of the lack of media coverage.
People fall in love with their assets. They just can’t believe that there isn’t at least one person out there that values their property as much as they do. But after 2 ½ years, shouldn’t they be waking up to reality?
Here are a few things that sellers need to know:
- Buyers don’t care what you paid for your property.
- Buyers don’t care how much you think you need to break even.
- Buyers don’t care that your listing price is lower than the listing price of comparable properties. They care about how your listing price compares to the price at which comparable properties SOLD recently.
- Buyers have lots of options. Your property is only one of several.
- In a buyers market, buyers are not as anxious to make a deal as are sellers.
- Carrying costs can eat you alive. If you’re monthly carrying cost (interest, maintenance, insurance, association fees, etc.) is $2,500, your investment will be $15,000 higher in six months. Do you think you will get $15,000 more if you wait six months?
- Think about how you would describe your property to the Property Appraiser’s office in order to justify a lowered assessment. These are the reasons a buyer will offer less than you want.
- Taking a loss on an investment does not make you a bad person. Even smart people make mistakes. Last year, multi-billionaire Carl Icahn offered $22 per share for WCI Communities, the developer of condos at Hammock Dunes. Today WCI trades for $1.81. But Carl got lucky. The company turned down his offer as too low.
Here are just a few examples of current listings that I do not believe are justified by present market conditions:
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Two North Riverwalk Drive Intracoastal lots in Palm Coast Plantation are listed at $379K and $375K respectively although two nearby lots recently sold for $225K and $215K.
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Three adjacent Intracoastal lots on South Riverwalk are listed at $419K, $349K, and $480K. A fourth lot is listed at $299.9K and a nearby lot sold recently for $300K.
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The median selling price of 52 Palm Coast lots sold since the first of the year was $30,000. The median listing price of the 1,202 lots still available is $59,045. Hello!!!
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Of 39 lots listed in Ginn’s Conservatory, 12 are above $300K. However, no lots have sold in that community in the past two years and there are 20 listed below $200K of which 2 are below $100K.
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Two salt-water canal lots in the "C" section are listed above $450K although no similar lots have sold above $287K in the last six months.
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An Intracoastal unit in Canopy Walk lists for $499K while an identical unit in the next building sold recently for $299K.
The list could go on for pages but I think you see my point. If you are serious about selling, discuss current sales of comparable properties with your Realtor® and adjust your listing price accordingly. Repeat the process at least every other week. If you are unwilling to do this, you are not seriously trying to sell your property. You are simply listing it. Your neighbors would rather you took down your sign. The properties that sell (and many more are selling today) are the ones that are competitively priced and/or attractively presented.
it’s the sellers prerogative
If a real estate agent and seller agree to list a property for X amount of dollars higher than the prevailing comps suggest is legitimate, then that is their prerogative. Yes, the idea is to sell but not all sellers are created equal. It ALWAYS comes down to money. What is owed, who is owed, do they owe anything and are they forced to sell. In this article by Toby, he makes the argument that the sellers in this market should just give up already and dump their property so he and his ilk can make more money with more sales and break this log jam of housing so the market can improve. He wants to see an end to this housing slump by putting the onus on the sellers to take it on the chin and wake up to reality. It was these same realtors who in a fast rising market 3/4 plus years ago continually overpriced homes with fantastical comps that did not hold up when the market turned. Can’t find a comp that puts this house out at $75,000 over its worth? Go 10 miles away and find the one comp that works. Buyers may have a lot of false hope that they can get back what they put in, but by the same token it’s not the job of the local RE ‘guru’ to ask them to take their medicine when it was he and his kind that helped get these same buyers in the position they are in. Let’s call it what it is. We were all at the same party between 2001 and 2005. Don’t start pointing fingers now because the lights came on and you need someone to blame.
RE: It’s the Seller’s Perogative
Sam–I appreciate you opinion, however I venture to guess that you have an overpriced home on the market right now. Pointing the finger at the RE community is easy; Realtors are the facilitators of bringing a buyer and seller together. They also influence asking (or listing) prices in the sense that they provide comparables for similar properties, which you too mention. However, they are only facilitators. It takes a Buyer to buy and a Seller to sell at a given price. Realtors cannot force someone to buy or sell. That is obviously up to the individual. And, theoretically, if someone is willing to sell at a certain price and another is willing to buy at the same price, that is the market price. The market price increased because housing is cyclical and we were all seeing our RE values rise. We are now seeing the opposite, which is just the nature of a cycle. It\\’s macroeconomics, which is not the Realtors\\’ fault.
Toby\\’s point is very simple and very clear. Sure there are people that are upside down on their \\\”investments\\\” and who can\\’t afford to sell at market price because they would need to bring too much cash to the closing table. That truely is unfortunate. However, what Toby is trying to convey is that if you home (or lot, condo, etc) is listed well above market price, it\\’s not going to sell.
And yes, he does probably want to see the \\\”log jam of housing\\\” clear up–and so should you. Our economy receives a great boost in many other sectors due to a healthy real estate market. It\\’s not so that Toby himself can profit but more so that we can become healthier as a whole.
Values
Appreciation is defined as an increase or rise in the value of property, or the act of estimating the qualities of something and giving it its proper value. real estate values in this country is more challenging than ever. Is a lot in Palm Coast only worth $30,000 because that is the recent price of sold lots? Is every home worth only the median? Of course not. You make good points but there are always multiple sides to all issues. I believe your commentary is plainly addressed to those individuals who need to sell now. These people must deal with the current market(defining current might present issues itself — yesterdays, todays or tomorrows value?). If someone has the financial wherewithall to hang on to their lots and or homes, they alone can establish new price points. Pretty fundamental concepts that can quickly change market conditions and buyer/seller perceptions. Let’s all hope we can determine the \”true\” level of sales to be expected in the coming months and years, and forecast our businesses accordingly. Thanks for providing a great platform to air all issues affecting us.
On the Mark
Hats off to Toby and CS. They both hit the nail on the head with their informative comments.
I would like to provide some economic benifits from the sale of 1 home. Economic contributions derived from the housing industry provide a litany of revenue for the county. The sale of one home generates hundreds to thousands of dollars in our city economy. In home construction, real estate brokerage, mortgage lending, title insurance, rental and leasing, home appraisal, moving truck services, and other related activities. Income generated from these real estate industries is approximately $15,500. Expenditures on consumer items such as on furniture, appliances and paint services is approximately $3,700. There is also an economic multiplier impact. There is greater spending in restaurants, sports games and charity events. This multiplier effect is estimated to be $9,300. Additional home sales induce additional home production. For every home sold approximately $21,400 is generated toward new home construction. The total economic impact of a typical home sale in Palm Coast with a median price of $170,000 will derive approximately $50,000 into the local economy.
Being realistic about the situation
I think all that Toby is trying to say is that we have to acknowledge that we are in a down market and the sooner we acknowledge it the better we are.
I am a realtor who made a lot of money for my investors (I had to work on the sale of 20 properties to earn what any one of my investors made in profit on 1 transaction) when the market was brisk. So I didn’t get to invest until I had enough money to pay for my purchases, and so was caught in the downturn of the market. I need to sell because real estate taxes are killing me these last 3 years, however I have no intention of selling at a loss because that means I worked for nothing all these years, so I stay put. All Toby is saying is for us to be realistic, if the price is not as you desire, don’t put your house in the market, it just add to the glut, it wouldn’t sell because the comparables do not warrant the price you’re asking. Realtors does not set the price for properties, we’re just intermediaries, the price is dictated by what the market will bear….we cannot just pull numbers out of the air, it has to make sense, otherwise it won’t sell.