Saturday, April 25, 2009


Change is a fact of life. That can work for us, or it can work against us, depending on our attitude.

A year ago, it was difficult to sit with potential sellers and talk about their prospects for selling into the face of a foreclosure-ridden, discount-driven market where price was the only thing buyers (investors) cared about.

What a difference a year makes.

I mentioned to my networking group this week that “the big difference between a year ago and today is that, over the past year, we have gone from a market which was dominated by price shoppers to one that is dominated by home buyers.”

That’s a significant distinction.

Thanks to the $8,000 first-time buyer tax credit, interest rates in the 5% range and home prices that have already adjusted downward by 10 to 20% at the entry level, first-time buyers are out in droves.

And where investors only want to talk about price, first-time buyers are often more concerned with the window coverings, paint colors and the view from the back deck.

In other words, houses are selling again.

Last year, it was a pure price war, plain and simple. This year, it’s a beauty contest, and that means sellers (under $250,000) who have taken care of their homes have the best chance to obtain a “retail price” that we’ve seen in the past few years.

In January, there were 2.36 “active listings” to each one under contract under $250,000.

In February, it was 2.07.

In March, it was 1.93.

In April, it’s 1.67.

That includes the short sales, overpriced retail homes and “dead inventory” that always clutters the market. The absorption rate under $250,000 is just 2.57 months, which means at the current pace of sales, all homes in this price range would be gone in less than 3 months if no new homes were to come on the market.

The fact is, that under $250,000, the demand is through the roof.

If you own a home under $250,000 and you have been looking for a good time to sell, it’s right now.

Interest rates will go up, the tax credit will go away, and all of 2010’s first-time buyers are scrambling to buy today so that they can get the $8,000 incentive.

If you would like a current market analysis of what your home may be worth in this market, please call or email.