The June 22, 2011 News Herald reported that sales of single family homes were up by 8% compared to a year ago! Great news, right? Well, at least it’s good news, it lets us know that houses *are* selling. The bad news it that the median sales price has DROPPED by 14% compared to a year ago, from $163,000 to $140,800. This drop in prices is being caused by banks unloading foreclosures at bargain prices. Those distressed sales drag all the other houses down with them.
In a normal market, appraisers will not look at “distressed” sales like foreclosures and short sales when they are establishing value on a normal transaction. But today, there are so many distressed sales that the appraisers don’t have much else to look at. I talked to a Realtor yesterday that said her last five deals had appraisal problems…in each case, the appraisals came in lower than contract price (one by over $70,000!).
The article also mentioned the effect of tight credit on house sales. Even people with significant cash to put down have to have a strong credit history to generate a loan. I see lots of houses that have been under contract coming back on the market, and it is often because the potential buyer couldn’t get a loan.
The silver lining on the cloud is that houses are still moving, as long as they are priced right. The article mentions that many foreclosures are selling in less than a month. I was recently involved with a property that was priced so well that it got bid up by several cash buyers. So don’t despair…if you price it right, it will sell. And if you need to sell quickly, I can help. I have cash available and I can usually close in a week or so, if you need to. Call me at 763-7355, I would be happy help you get your house sold!