Price & Affordability Trumps Location!

Steve Murnick of RE/MAX Central in Roselle, IL, exclusive HouseHunt member-agent for Bloomingdale in suburban Chicago, also reported increased buyer activity: “Definitely! We’re getting lots of phone calls, getting showings, making offers and getting offers accepted. Our spurt started a couple of weeks ago.” He agreed that the tax credit is attracting first-time buyers but is fearful of an activity stoppage after the deadline:

“I think the deadline will knock a whole lot of first-time buyers off the fence. They are already getting a little nervous that they will lose the credit if they don’t act quickly. And, as far as price-location priorities, buyers want it all! They want everything, they want location and they want price. Because there are so many houses for sale, they think they can have their cake and eat it, then get another piece for free.”

Conversely, the lack of an abundant inventory of unsold homes presents a major challenge for Terry Oelschlaeger.

“We have a huge number of qualified buyers who are very frustrated right now because there is no inventory to purchase. We have more buyers than sellers,” said Oelschlaeger of CENTURY 21 Diablo Valley, CA, exclusive HouseHunt member-agent for Concord in the San Francisco Bay area. I’m seeing strong buyer activity with limited bank-controlled inventory. When we do close a sale, our average time on the market from listing to contract is 10 to 30 days. Anything that comes on the market bank-owned and priced correctly will attract offers within a week. Our banks are using a strategy of listing properties below market value. As a result a large buyer pool immediately responds with multiple offers. Typically the property will sell for more than it is realistically worth.” Oelschlaeger added: “We feel that we will have a real shortage in housing in about 18 months because there is virtually no building going on in the Concord area.”

Steven Ringold of Keller Williams Realty in Alexandria, VA, exclusive HouseHunt member-agent for Mount Vernon and Great Falls, also has more buyers than sellers: “We have a hot market but a lack of inventory. Everyone is competing for every house that becomes available. Average time on the market for a listing to sell is 10 to 30 days. Our average home price is about $400,000. Most of our sellers are getting more than 100% of their asking price.” Greatest activity is coming from repeat buyers, he said. Investor activity is also up. Price and affordability currently outweighs location as a priority, Ringold said.

Dan Jasmer of RE/MAX Excellence in Sarasota, FL, exclusive HouseHunt member-agent for Siesta Key, said the top priority of buyers in his community is also price-driven: “I think price is the most important thing for all of our buyers, no matter if the property is $50,000 or $3 million. They are interested in getting the best possible deal. Location is now running a close second.” Jasmer and his partner, Marnie Matarese, agreed that the Sarasota housing market has been experiencing a steady change for the last 12 months and seems to be ahead of the rest of the state in any economic recovery. They said that Siesta Key’s excellent beaches and cultural amenities are part of the attraction for first-time buyers, retirees and tourists. Average home price is about $500,000.

Also reporting increased real estate activity in the past six months are Jackie and Ed Lewis of Connect Realty in Southport, NC, exclusive HouseHunt member-agents for Brunswick Forest in the Wilmington NC, area. “Yes, we’re seeing more sales and more listings,” Jackie Lewis said. “Most of our clients are people who have relocated here to retire. Brunswick Forest is a beautiful, beautiful community located close to the beach and is still being developed. Our greatest activity is from repeat buyers and retirees. We don’t have many first-time buyers.” She said most Internet inquiries are for properties in foreclosure. “They want properties priced low and located near the water. Our median price is between $200,000 and $225,000.” She added, “It’s a great area for folks planning retirement to consider.”

The latest HouseHunt survey also showed that home prices are showing signs of stabilizing in metro markets that have gone full circle since spiking in 2005-2007. These markets include: Chicago, Las Vegas, Phoenix, Sacramento, San Diego, Tampa, Washington, DC, and Orange County, CA. (See graph.) Other metro areas like Atlanta, Boston, Denver, Charlotte, Dallas, San Francisco and Seattle thus far have experienced lesser price swings.

The U.S. real estate boom-bust cycle of housing prices is also mirrored in the national median price of an existing home. In 2001, the national median price reported by the National Association of Realtors was $147,800. It rose to $170,000 in 2003; $219.000 in 2005; slipped to $217,900 in 2007; and dropped to $169,100 in the first quarter of this year.

“Realistic pricing is also having a positive impact on home sales,” Bearden noted. “Second quarter survey results show that 81% of sellers said they are getting at least 90% of their asking prices. Only five percent said they are getting less than 85%. This improvement is also reflected in the average time it takes to list and sell a property. Currently, 36% of respondents said homes are selling on average in 90 days or less – and another 35% reported average sales in 90-120 days.”

Another area of improvement is in price appreciation. Thirty percent of HouseHunt member-agents reported positive or neutral appreciation for their sellers in the past 12 months. This compares with only 18% in the first quarter.

Sellers still outnumber buyers by almost a two-to-one margin, however. Inventories of unsold homes, bankruptcies and lagging lender appraisals continue to slow the overall housing market recovery, Bearden said.