It’s a buyer’s marketWritten by Jody Zink | | email@example.com
Real estate is stabilizing, softening, sagging or bursting, depending on who is talking. Online discussion boards run rampant on the topic. Media types like it, too. Is there a bubble? Are we at the tipping point? If there is a bubble, when will it burst?
I suppose I’m too young to lose sleep over it. I’m still recovering from lost sleep back in second grade when I learned about the killer bees coming from Central America in my Weekly Reader. Scientists had the proof! Killer bees had crossed the Mexican border and were moving into Texas.
That day on the school bus ride home, it weighed on my mind: It was just a matter of time before killer bees were in the Midwest. There was even a map showing how far they’d already come.
At the tender age of eight, I wondered how we would keep these killer bees out of the house: Would we need special netting like the beekeepers wear? Would life as we knew it be compromised? Would this mean no recess?
Getting back to the bubble, I’m of the opinion that some markets may be overpriced, but generally, the market prices itself based on growing demand for home ownership. There will always be cyclical patterns, but we don’t have large upswings in appreciation here. Therefore, chances are slim that the bottom will fall out.
There’s a lot of homes for sale in Northwest Ohio. Since 2000, the number of homes for sale on the Multiple Listing Service has increased by more than 1,500 per year, on average. I venture to say the number of buyers, however, is not keeping up with that increase. This leaves us with a classic case of a buyers market.
In a buyer’s market, sellers will have to work harder to sell — maybe do some sprucing up with landscaping and fresh paint, not to mention pricing it right. Their Realtors will work harder, too. More time and money will be spent on networking, creative advertising and open houses to create more visibility.
Since 2000, homes sold for an average of $10,500 less than what they were listed for. So far in 2006 however, the gap has widened — to a difference of almost $18,000. A home listed at $147,000 (the approximate average list price for 2006) is selling for about $129,000 (the approximate average sale price for 2006).
In other words, we’re pricing higher and getting less. What gives? In 2005, the average sale price neared $130,000. Are we overconfident? Maybe there’s more and more unrealistic sellers out there and buyers are getting the last word. Maybe it’s overpricing due to anxiety from the upcoming spring market when things start hopping? 2006 is still young, so maybe the market will average itself out come December.
Whatever happens, I’ll try not to lose much sleep. After all, I’m nearing 30 now and still waiting on the killer bees. All that sleep lost for nothing. I guess I’ll admit the only reason I lost my recess was for talking out of turn.
Jody Zink is a licensed Realtor in Ohio & Michigan with the Loss Realty Group. She can be reached at (419) 725-1881 or through her website at www.JodyZinkRealtor.com.