The latest data shows home sales plunged in July to the lowest levels in more than a decade, a report far worse than most experts had forecast. If you’re in the market as a buyer or seller, what does this mean for you?
For most, it suggests that patience will be the best policy.
The National Association of Realtors said Aug. 24 that homes sold at an annualized rate of just 3.83 million units in July, 25.5% below the level of July 2009, and more than 27% below the level a month earlier in June. The median home price went up just 0.7 % over the past year. Also remember that the market had a huge overhang of homes for sale, which was more than a year’s supply. And that’s what might have caused these prices to drop.
Is there any silver lining to be seen in all this? Certainly low prices are good for buyers, especially first-timers who don’t have to sell a home before they can buy one.
In the long run, people may be better off if homes are seen as homes rather than investments as well. The home-as-investment fever of the past years often drove people to spend more than they needed to or should, soaking up money that might have fared better in other investments.Today’s home seller obviously has to be patient and “realistic,” a term real estate agents often use to help them accept a lower price.
While figures show that home prices have leveled off, the numbers represent only the homes that have actually sold. It doesn’t do the seller any good to hold out for a dream price if the home won’t attract a buyer. And many homes have just been sitting on the market for months and months.
In a buyer’s market, sellers are smart to do all they can to sweeten the deal. Throwing in appliances, home warranties and anything else they can think of might save the buyer some headaches and expenses.
Of course, it only pays if these things can be done inexpensively, as many improvements do not pay for themselves when the property is sold. Painting and landscaping are generally the most cost-effective improvements, especially if you do the work yourself. And sellers are also wise to remove clutter, odors, stains — basically anything that hurts a buyer’s first impression.