Topping the heap as one of the most popular questions for homebuyers everywhere -- "How Long Has That House Been on the Market?" has numerous implications.
Upon hearing that a home has been on the market for a lengthy period of time, most people make one or more of the following assumptions:
- There's something wrong with the house.
- The price is too high.
- The sellers are willing to negotiate.
- The sellers don't really want to move.
- There's something else we don't know (about the home, the neighborhood, the sellers)
Typically, when a home is on the market for a significant amount of time, over and above the average time on market in a given area, that's a strong indication that the home is overpriced. Many sellers do themselves an injustice by overpricing their home for sale at the beginning.
There may be several reasons why sellers overprice their homes:
- Ego -- they want to clear as much or more than their neighbor did when they sold.
- Improper Guidance -- somebody told them they could sell the house for that much.
- Unrealistic Expectations -- the sellers don't realize nor follow the ups and downs of the market.
- Testing the Market -- the sellers lack real motivation to move, but will for "their price."
- Built in Negotiating Cushion -- instead of pricing right and getting a sale, the sellers believe that they need to price the home high to leave room for negotiating down.
For realistic advice on pricing your Northern Virginia or D.C. home, CLICK HERE FOR A PRELIMINARY MARKET ANALYSIS OF YOUR HOME'S VALUE.
As a buyer seeking property either for your residence or as investment, you will most likely find that homes that have been on the market a long time rarely have anything truly wrong with them, except the price. Properly motivated sellers will likely be much more willing to negotiate on price and other terms when there home has languished on the market for months. You should start by researching the average amount of time that homes spend on the market in the community that you wish to buy. For example, take a look at this article about Alexandria, Virginia: How long does it take to Sell a Home in Alexandria, Virginia?
When you look at homes that have spend an above-average amount of time on the market, you are likely to be able to find and negotiate a good deal.
Currently, the average time on market varies throughout different parts of Northern Virginia, but generally ranges from about 3 months to 5 months, depending where you look.
As of the end of January 2008, there are 117 homes within Alexandria, Arlington, and Fairfax County that have been on the market for over a full year. Of these homes on the market for 365 days or more, 50 are priced in the million dollar plus range. However, there are homes ranging in price from $195,000 to $14 million that have spent this much time on the market.
Perhaps you can get a great deal on one of these:
LIST PRICE DAYS ON MARKET
ALEXANDRIA CONDO 2 BR 2 BA $419,900 377FAIRFAX STATION HOME 5 BR 4.5 BA $848,967 511
MCLEAN TOWNHOUSE 3 BR 3.55 BA $850,000 590
ALEXANDRIA COLONIAL 5 BR 4.5 BA $930,000 511
MCLEAN HOME 4 BR 4.5 BA $1,649,000 394
FAIRFAX HOME 5 BR 5.555 BA $1,798,777 499
GREAT FALLS ESTATE 5 BR 7.55 BA $3,095,000 391
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Brian,
Some people just won't understand that the buyer make the market..it's what they are willing to pay in this market. The prices will go down because buyers make lower offers and if the sellers accept them ...well then values go down.
For example my seller got her price she wanted but it appraised for 19K less so she had to decide if she really wanted to wait and hope the value goes up or sell it at the new price. Unmotivated sellers will-just be wasting their time unless someone is willing to pay cash and not appraise and that will only cause the domino effect....we had it crazy with high numbers well now we have the low numbers. Thats why homes sit for longer periods now because they aren't getting anyone willing to pay high.
There is now 9 months of inventory in the US...17 on FL.
A great many agents and buyers simply "though out" properties with excess Days on Market. They assume one of the things you mentioned. Many Sellers don't have a chance appealing to those agents and their clients.
I also look at the latest price drop along with DOM. If it's been on the market 300 days and has not had a price drop - that tells me more than just 300 days on....
Thanks.
Donna Sandstad
Brian, you're so right about that being the number one question. In addition to price, a lot of houses are just too hard to show - Realor eating dog, call the agent a week in advance and schedule the showing when the moon is full, and oh, yes! Don't forget you have to wear a purple tie!
Brian, I like the way you tied your data in with your marketing. There is a lot of education that both buyers and sellers need in this market. I find that often the higher the price, the more restrictive the showing instructions--and higher the DOM. I hope you generate some business from this post; it was well thought out and presented. I am going to bookmark it.
I randomly came across this article by searching google. I was looking for tips on how to approach bidding a house that has been on the market over 364 days. Around here, that is a lengthy amount of time. I have seen the inside of the house and have not done an inspection yet though. I know that the price is REALLY high (I don't think has ever dropped since it's been on the market) and it's REALLY outdated. It would require a lot of WORK to put it back into shape, almost the cost of the house actually.
I am curious as to why I should even attempt to approach such a house. The state of repair it would need (not sooo bad, but bad enough my kids will be living in an almost the entire house being updated for at least a few years) and the cost of closing/fees/downpayment make me just want to avoid any houses like that in the future.
Don't get me wrong, I know it is a buyer's market now. I also know when I see someone trying to take me for a fool. I've done house-searching in several states over the year (being military family) and so far I have only come across maybe 2 houses in the last decade of searching that have even slightly jarred me into going "omg, I want THAT!".
Houses in this area with the same square footage, updated fully, and better amenities in the agreement, are going for MUCH less. Think about 50,000$ less. It's insane the amount of money these people want. It's also hard to find that extra bedroom for your office without incurring another 40,000$ on the asking price! The office doesn't even need to be bigger then a closet either. Insanity! Please, don't get me started on "bedrooms" that are really the size of maybe my daughter's twin size bed and that's all that could fit in there.
I agree with "A Protential Buyer". I have been mainly hesitant, especially now, to BUY a house (knowing I will be there well over 30+ years) when that house is WAY too costly. It seems like sellers are all trying to continue to sell their houses like there is no depression at all. Their prices are still too high, and their houses are falling apart. They try to hook you in with "oh 7 bedrooms, 3 bathrooms", but in reality that means 3 bedrooms that they added a wall in between cutting the bedrooms in half...and to the size of a shoe-box. (Not that I NEED 7 bedrooms, just making a point.)
I can officially say I am disgusted with the housing market now. I have waited till now to be 100% committed in buying a house, but now I am even more considering just buying 2 acres of land and steering clear of the entire ordeal. Even with the whole benefits from buying a house, especially being a first time buyer (and a picky one damn it!), I can't see a big upside from bidding on this house I'm looking at or just BUILDING one.
Consider me an irked customer. I'm tired of being lied to about the state of houses, their issues in general (needs a new roof etc), and how much the price should REALLY be. Please wake up people, your house isn't that exspensive...drop it down, especially now if it's not selling!