Archive for October, 2013

Friday, October 11th, 2013

A few days ago I posted this update about the market:

 A friend sent me the following text:

 “Just read your blog.  What are you doing to get past this little stall we are in?  Any advice?”

 Yes.  When the market slows, as it has, it does not mean that “nothing is selling” or that it has all gone to hell.  Buyer activity (which is what drives the market) is never really constant.  It is always fluctuating – and therefore the relationship between supply and demand is seldom static – it is normally moving.  It is that relationship between supply and demand that tells you which way prices are moving.  Trying to determine the actual rate of increase or decrease WHILE it is occurring is difficult.  After the fact, it is an easy calculation.

 You can see examples of this by observing how major banks behave in pricing their REO properties.  They tend to be out of sync with the market.  3 or 4 years ago, they were under pricing everything in our area and the buyers would bid them up to the “actual market price”.  Recently, they have been overpricing lots of inventory.  Part of their problem is how removed they are from the scene and they usually rely on asinine economist’s data or the kind of crap companies like Core Logic churn out.  It is just simply wrong.

 No agent ever needs to make that error.  Here is what is true.  Any house is “worth” what a willing buyer will pay for it and a willing seller will accept.  Now.

 The is the point that is typically missed.  Now.  How much will they pay for it, NOW.  Not what did the agent think it was worth last month.  Or how much it might “appraise for” next year.  Now.

 Overpriced listings in ARMLS are not rare.  The Days on Market (DOM) count is growing.  Why?  Not priced correctly.  This is SO simple, even a Realtor can do it! 🙂