I’ve been pretty busy this past month showing houses, negotiating and even selling them, and while we’ll have to wait for September’s statistics to come out before there’s hard data, my general impression is – surprise! – there’s still a long way to go before our inventory adjusts downward to prices where they’ll sell.
Houses are selling – no doubt about that, but at roughly 2003 prices, where they’ve been stuck for years. Some houses bought in 2010 and 2011 are getting close to what their sellers paid for them then, but 2010 prices were so hammered off historic highs that their sale now doesn’t demonstrate an improvement. People who bought in 2006 and 2007 are the worst off, but there is so much out there priced as though the market crash never happened that, I think, we’re going to continue to see a bloated, overpriced inventory for a long time still.
What I am seeing, and I suspect the median sales price statistics will bear this out, is the gradual erosion of prices: houses that once asked $3.5 million will still sell, but only after they’ve been marked down to $2.5, and this is true in all price ranges. What that means is that I can now show clients houses at $2.5 that are equivalent to or even better than houses asking $1 million more – guess which ones we’re bidding on?
Sellers, for the most part, seem to be those bitter clingers our President complains about, insisting that they can still get 2007 prices for their homes and refusing to budge from the religion that says Greenwich is special and immune from economic reality and competition. Again, my vague impressions are no substitute for hard data, but that’s certainly what I’m seeing – there’s a large pile of dross out there, and it takes real effort to sort through it and find the few houses offering value. That’s exactly what my clients, and surely everyone else’s, are doing: sorting. And if they can’t find value in their price range, they’re not holding their noses and paying more than they think a house is worth, they’re retiring to the sidelines and waiting.
Sellers seem to think they can wait buyers out – my money, and that of my clients’, is on the other side of that bet.