Archive for February, 2008
Tips For Buying And Selling In A Turbulent Market
In today’s turbulent real estate market, many buyers and sellers seem to have become confused about negotiating tactics.
Many buyers assume that every property is overpriced and that low-ball bids are de rigueur. Sellers often recoil at these “insulting” offers, which typically leave no room for negotiation.
The result: a potential deal collapses and both parties lose.
It’s no secret that the real estate market is correcting, but we believe buyers make a serious mistake when they automatically assume that every list price is inflated. Sellers who fail to entertain fair offers miss lucrative opportunities.
The best advice for buyers and sellers is to put their real estate agents to work. Demand comps (comparables) of properties recently sold, and then start negotiating from that point. Selling prices for comparable properties is a far better litmus test for the worth of a home than blind emotions or unfounded assumptions about the state of the market.
Capitalize on your agent’s expertise. Use facts and not emotions to guide your buying and selling decisions.
Today’s real estate market holds significant opportunity for buyers – opportunities not likely to be seen ever again given the desirability of Sarasota and Manatee Counties and population trends. The most successful buyers and sellers will be the ones who make their agents do their homework.
2 commentsHave We Hit Bottom?
There’s no shortage of pundits offering opinions about the current real estate malaise including last Friday’s presentation from Jack McCabe.
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“The U.S. housing crash continues. It’s a terrible time to buy.”
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Home values will stabilize again, but it will be a rocky ride until they do — especially for home sellers. If you are thinking about selling, try to ride it out.”
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“With the value of the U.S. dollar low and real estate prices dropping, it isn’t hard to imagine foreigners taking bigger positions in properties here as part of their overall portfolios. At the first blush of renewed energy, the real estate market will bounce back.”
Only a lucky soul with a crystal ball can confidently predict the near-term future of the residential real estate market. As I don’t have one, I’ll deal with the facts of the local Sarasota and Manatee market.
The Downside
Real estate is driven by supply and demand. As of January 2008, the inventory for Sarasota and Manatee was 14,000 properties – a number that has remained relatively unchanged for the past six months.
But this number is at an all-time high. In 2003, by contrast, inventory was about 5,000 homes.
The downside is painfully obvious: inventory is dramatically up since the heady days of a few years ago.
The Upside
Buyers have not shied away from the housing market. The number of homes sold since 1998 has remained fairly constant – 650 to 850 units per month – with the exception of a few banner months during the real estate boom in 2005.
Here’s another important fact: there are few new projects under development in Sarasota and Manatee Counties. So no new additional pressures will be put on sellers.
Another important criterion in evaluating the real estate market is comparing list and closing prices. This gives true insight into the health of the market and can help buyers determine where they should be making offers that have a possibility to meeting acceptance.
Our research shows that homes going for $1 million+ are selling for 89% of list price but there are dramatic swings and still situations of full price multiple offers and therefore buyers and agents must do their homework before automatically assuming that a property is over priced.
How I See It As long as absorption (purchases) remains fairly consistent, the Sarasota and Manatee markets will slowly rebalance themselves. And I believe absorption will remain constant because this is a desirable part of the country.
With a beautiful climate, world-class culture and arts, excellent schools, and a modern infrastructure, Sarasota and Manatee Counties will weather the downturn better than many other parts of the nation and buyers should take notice of the unprecedented number of choices and motivated and realistic home owners and developers.
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