SALES AND VALUES - A LOOK AHEAD

01.15.09

In 2009, SELLERS and AGENTS hopefully await for a turnaround in the real estate business. The wait could be a long time coming. The timing is elusive; everyone has an opinion that seems to range from later this year to a couple of years down the road.

Whatever the timing, it is clear that future appreciation of real estate will probably "start" from a new value base that could be quite different from those that were reached over the 12-24 month period that seemed to peak right around August of last year.


Exceptions to this "future" prediction will exist, but be rare in my opinion. Some current transactions, when they are closing, are showing considerable compromises in selling values. Smart sellers are "seeing the light", are willing to listen, and will respond responsibly to "appropriate" offers that are made. Slow responses can result in a "lost" transaction.

When is the bottom going to hit our area? Few of us in this business really know. Note the comment in the first paragraph. Trying to convince buyers of what constitutes good value is proving to evoke a response ranging from disbelief, to outright derision. From a seller's standpoint a rejection of a reasonable purchase proposal today, may mean no follow up offer for weeks, or months.

Evidence of this "problem" is based on several 2008 examples, where offers on a (the same) property declined over a several month period during 2008. Each time the owner refused one, in hopes that better times would return; a later offer from another party was lower. Those examples are still on the market today.

For 2009, I think that the offers made to listings will close only if sellers make the hard decision to move on with their lives. Negotiations will be tough at best, and any closed deals will likely result in setting a new "value base" for our NW CT area. Buyers are definitely in control, if they are around at all, and for time being, for sellers, it is not likely to be "pretty". Patience, EVERYONE!

©2009 R. Leech features.