I was quoted three times in an article on the 2010 real estate market discussing how sellers have adjusted to falling property values.
“Look at it like the stages of grief,” says J. Philip Faranda, the broker-owner of J. Phillip Real Estate in Westchester County, N.Y. “In 2006 and 2007, it was denial; in 2008 and 2009, it was mourning; in 2010, it’s acceptance.”
Sellers slow to change
It’s not surprising that it would take some time for sellers to come to terms with the market’s rapid and drastic changes. It’s a learning process — a “price-discovery process,” in economic terms.
Sellers frequently concede they’re harboring unrealistic expectations only after having tried and failed to sell their home. (See “Are you the reason your home won’t sell?“) Or they’ve watched other sellers reduce prices repeatedly to get buyers to even look at their homes, then seen those sellers relinquish additional ground when negotiating.
Pride often prevents sellers from seeing foreclosures as the new competition.
“If a guy with a half-million-dollar house still thinks it’s worth $600,000, I can show him two or three foreclosures that are listed for $400,000 and $450,000 and ask him how he thinks I’m going to hypnotize people into buying his house for $600,000,” Faranda says.
The Internet has helped change expectations. A seller traditionally blames his agent when his home isn’t selling. But today, Multiple Listing Service and syndication agreements let sellers list homes for sale on a dozen or more Web sites (take a look around your neighborhood), so “all the old excuses of ‘you’re not advertising my house’ have gone away,” Faranda says.
The reporter told me that she found me on Active Rain, which is nice to hear. I post quite a bit on that blog. The link is in the sidebar. I also got a nice hate email, from some anonymous guy who told me what a bad person I am because I helped cause the economy to fail. His presumptiveness is secondary; I acknowledge his frustration.
My main point in the interview with the reporter was that, once listed, a home becomes virtually ubiquitous, and, therefore, the main reason any home doesn’t sell is price.