The Housing Crunch: Unrealistic prices often keep buyers at bay

LYNN ? Real estate agents have begun shunning property owners who seek unrealistically high prices for their homes as the market continues to spiral downward.The Massachusetts Association of Realtors (MAR) last week released its August 2007 housing sales numbers, indicating detached single-family homes were up 6.6 percent compared to the same time last year. The association also reported sales of condominiums were up 3.4 percent from a year ago.However, the median price for these properties was down, a key factor in fueling the sales. During the first half of 2007, the median sale price for a single-family in Massachusetts was $317,000, down 4.7 percent from one year earlier, according to The Warren Group.In most instances, real estate agents assume the seller will agree to adjust the asking price to reflect market fluctuations. After all, they know that when the seller insists on maintaining an exorbitant price, a sale becomes less likely, and translates to more work for what could be no commission for the agent. This situation is leading more agents to shun such sellers, based on a survey of realtors.Lynn-based broker Annmarie Jonah, quoted in a September issue of the trade publication Banker and Tradesman, acknowledged that the real estate slumps has led some brokers to turn down listings if they think a seller is being unrealistic with the asking price.According to Jonah, her company, Annmarie Jonah Realtors, declined to represent about 20 home sellers in May and June because the sale prices were just too high. As she put it, “We had reached a place where we needed to explain to sellers the cost of taking on listings.”Offering an example, Jonah said one transaction leading to the decision by her office not to list certain properties, involved a Lynn home that was originally listed for $589,000. The price was eventually lowed to $529,000. The decreased asking price attracted a buyer, but the mortgage holder refused it because the homeowner owed more than the price offered. As a result, the property went into foreclosure.”Buyers want the best house at the best price,” she said. “Only the most pristine houses at the most pristine prices are selling.”Lynn broker Don Baker echoed Jonah’s assessment of the situation. “Asking a realistic price is important,” he said, citing a single-family home sold in Nahant earlier this month for $289,000. “We had eight buyers looking at it and one didn’t want to lose it, so she offered the asking price, which seems low for Nahant. But it’s an older, very small house, with a tiny yard and it needs upgrading. The whole lot is only 4,000 square feet.”Nonetheless, the property sold quickly because of the price.Baker noted assessments are relatively high in Nahant, reflecting prices from 2005 when the real estate market was still booming. “Values have decreased 12-20 percent since then,” he said. “And that’s something you have to take into account when you meet with a seller.”Although sales are increasing, mostly due to lower pricing, the market remains in flux, said Baker, citing a recent 60 Minutes television show interview with former U.S. Federal Reserve Board Chairman Alan Greenspan.”Alan Greenspan is right on. He’s my guru. Every time he speaks, he gets it right, and he basically pointed out the reality of the marketplace. Things were high for so long, and it is taking a while for the market to settle. Prices were ridiculous and the prime lenders were contributing to the feeding frenzy,” Baker said.But while lower prices are a first step toward a winning sales strategy, convincing sellers can be difficult.”I had a house in Salem. The seller wanted it listed for $375,000. I told him $275,000 was more realistic. So it sits around like a white elephant,” Baker said. “Most of my colleagues are realistic. Four or five times a month, we go out to look at homes. If the sellers don’t want to listen, rather than have us spin our wheels, I tell them to go with another broker. I tell them this nicely be

More Stories In Business