Chris Loeliger
Windermere Real Estate/S.C.A., Inc
Chris Loeliger | Direct: 425-785-9217 | Email: cloeliger@windermere.com
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How Low Will You Go?
Posted on February 10, 2011
I recently had a conversation with a good client of mine. We'll be listing her house for sale shortly. She's a smart woman and well aware of what the market is like for sellers right now. She had a tough question for me. She wanted to know, if she got an offer on her house, just how low an offer price would someone be willing to write up and should she be offended if an offer came in really low.
It's a tough question because there is just no way to predict just how low an offer someone might write. We can make our best effort to price the property appropriately but that doesn't necessarily mean a thing to a buyer. For instance, there are any number of buyers out there "...looking for a deal!" They are fishing more than anything to see how desperate a seller is. They'll write any offer on a whim if there is the smallest chance someone might accept it. On the other hand there are well educated buyers out there that seriously want to buy a good house, recognize where the market is, write a good offer but still negotiate hard to get their price. Gone are the buyers that are willing to pay full price or over asking price just to lock it up before someone else gets the house.
So, which of those buyers might she have write an offer? Any. All. None.
To me the easier part of the question to answer was whether she should be offended by any low offers. This I could answer with an emphatic "no!" My client was very surprised by this. She felt that any offer that was "too low" shouldn't have been written in the first place. She was preparing herself for the shock of a low offer and getting ready to be offended.
Of course, I suspect that she sees the offer only from her viewpoint as a seller. She thinks that she has the value of her house figured out dead on (maybe she does, maybe she doesn't, really doesn't matter to me for this discussion). I spent some time explaining to her that from a buyers perspective they could view her asking price to be just as offensively high from their perspective as she viewed their offer to be offensively low from her perspective.
My perspective as a Realtor is probably different still. I am absolutely thrilled by any and all offers. To me they are a starting point to negotiate around. Maybe nothing will come of it because the gap is simply too large between asking price and offer price. But, with an offer in hand at least it gives me something to work with. I know who to talk to, spend my time with learning goals, motivations, needs, wants, whatever. Something is better than nothing.
Likewise, regardless of how low the offer is, I always encourage my clients to respond to it (as opposed to just ignoring it) even if they only come of their asking price fractionally. Again, it just makes good sense to me to keep the conversation going between the two parties and hopefully put a deal together that both sides are happy with.
But, it got me thinking. Would you be offended with a really low offer on your house? Or alternatively as a buyer, would you refuse to write a low offer on a house with a high price because you think it might be offensive?
Come one, tell me, how low are you willing to go?
I know there are agents out there reading this with strongly held opinions on this... I want to hear from you too and to encourage you I'll dish on myself. The lowest offer I have helped a client write up was at... drum roll... 57% of asking price!
Anyone else ever go that low? Is there a low that is too low?
-Chris
Post a Comment : Author: Chris Loeliger
January 2011 Statistic Details
Posted on February 8, 2011
I gave a quick overview of the January Statistics from the NWMLS on Monday. I always like to dig a little deeper around my area. So, starting from a very high level and moving to smaller areas here's what January had for us.
| Area Wide (Entire NWMLS with a few small exceptions) | ||||
| Jan-10 | Jan-11 | Change | Change % | |
| Number of agents | 23358 | 21845 | -1513 | -6.5% |
| Active listings | 34216 | 32593 | -1623 | -4.7% |
| Median Price | $291,550.00 | $254,900.00 | $36,650.00 | -12.6% |
| Average price | $419,262.00 | $369,657.00 | $49,605.00 | -11.8% |
| Pending Listings | 5579 | 5393 | -186 | -3.3% |
| Median Price | $259,900.00 | $235,000.00 | $24,900.00 | -9.6% |
| Average price | $321,972.00 | $301,433.00 | $20,539.00 | -6.4% |
| Closed listings | 3142 | 3207 | 65 | 2.1% |
| Median Price | $259,903.00 | $243,500.00 | $16,403.00 | -6.3% |
| Average price | $316,140.00 | $305,428.00 | $10,712.00 | -3.4% |
Now, some of you may have noticed that the median prices listed here don't match what I reported on Monday. Well, it's true. These numbers reflect only single family residences and condominiums. Whereas, the numbers I reported on Monday included all property types which include land, farm and ranch, and others. These numbers are the ones I like to report as the reflect the majority of the homes we really live in day to day.
There are a few numbers that stand out to me. The number of active agents is down 6.5%. That feels like a lot. But, we're still way over the number of agents we had last time this was a healthy market. For instance, in May of 2003 there were 16,611 agents in the NWMLS. We still have 5000 more agents than that right now. Being an agent is a tough business to make a living in right now and I think we'll continue to see agents leave the business for some time to come.
I think the other thing that really stands out to me is the incredible volatility of the numbers. There aren't two months in a row of the prices, activity or anything moving in the same direction. Take my entry from February 1. In that entry I was making the point national media was reporting down numbers from November when more recent numbers from December were up. Well, here we are again one month later and the numbers are down again. No consistency at all in the market. (I really need to talk about rolling averages!)
Narrowing down a little, here's the same table for King county.
| King County | ||||
| Jan-10 | Jan-11 | Change | Change % | |
| Number of agents | 11919 | 11419 | -500 | -4.2% |
| Active listings | 10679 | 10294 | -385 | -3.6% |
| Median Price | $365,000.00 | $307,060.00 | $57,940.00 | -15.9% |
| Average price | $571,928.00 | $494,301.00 | $77,627.00 | -13.6% |
| Pending Listings | 2211 | 2101 | -110 | -5.0% |
| Median Price | $334,900.00 | $299,950.00 | $34,950.00 | -10.4% |
| Average price | $416,871.00 | $396,483.00 | $20,388.00 | -4.9% |
| Closed listings | 1222 | 1259 | 37 | 3.0% |
| Median Price | $350,000.00 | $333,500.00 | $16,500.00 | -4.7% |
| Average price | $420,535.00 | $411,353.00 | $9,182.00 | -2.2% |
The number of agents here in King county represents more than half of all the agents in the 22 counties or so that the NWMLS serves. Additionally, the number of agents here is down only 4.2%. Again, my point remains that we need to see more move out of the industry. Sorry, that sounds cruel and it isn't meant to be but I think it is true that we need fewer agents.
How about the number of closed listings? Up 3% compared to last year! Nice. We may see that percentage come down in the next few months as the effect of the increased closings last year due to the tax credit really took hold in March and April.
Zooming in even further here are the tables for the Sammamish and Redmond areas respectively.
| Area 540 (East of Lake Sammamish) | ||||
| Jan-10 | Jan-11 | Change | Change % | |
| Number of agents | - | - | ||
| Active listings | 723 | 735 | 12 | 1.7% |
| Median Price | $478,500.00 | $439,950.00 | $38,550.00 | -8.1% |
| Average price | $610,838.00 | $587,797.00 | $23,041.00 | -3.8% |
| Pending Listings | 149 | 151 | 2 | 1.3% |
| Median Price | $459,900.00 | $425,000.00 | $34,900.00 | -7.6% |
| Average price | $467,630.00 | $479,126.00 | $11,496.00 | 2.5% |
| Closed listings | 89 | 101 | 12 | 13.5% |
| Median Price | $445,000.00 | $449,000.00 | $4,000.00 | 0.9% |
| Average price | $502,661.00 | $477,435.00 | $25,226.00 | -5.0% |
| Area 550 (Redmond/Carnation) | ||||
| Jan-10 | Jan-11 | Change | Change % | |
| Number of agents | - | - | ||
| Active listings | 371 | 326 | -45 | -12.1% |
| Median Price | $489,000.00 | $499,975.00 | $10,975.00 | 2.2% |
| Average price | $607,096.00 | $629,562.00 | $22,466.00 | 3.7% |
| Pending Listings | 81 | 69 | -12 | -14.8% |
| Median Price | $429,000.00 | $355,478.00 | $73,522.00 | -17.1% |
| Average price | $479,599.00 | $378,379.00 | $101,220.00 | -21.1% |
| Closed listings | 49 | 37 | -12 | -24.5% |
| Median Price | $485,000.00 | $383,000.00 | $102,000.00 | -21.0% |
| Average price | $481,539.00 | $426,539.00 | $55,000.00 | -11.4% |
Redmond and Sammamish are right next door to each other. They have their differences but both appeal to a pretty similar demographic. In Sammamish pending listings are up 1.3% and closed listings are up 13.5%. Right down the street in Redmond pending listings are down 14.8% and closed listings are down 24.5%. How can two similar places have such radically different results? I think this illustrates the market volatility I mentioned earlier.
If you are looking at these numbers and wondering how to make sense of them, what your current house is worth on the open market or what the house you want to buy is worth... call me (or your favorite agent, but I'd rather you call me!). I can't tell you with 100% certainty either, but I assure you that I can give you the information you need to know if you are getting a good deal or not.
Chris Loeliger
Post a Comment : Author: Chris Loeliger
January 2011 Statistics
Posted on February 7, 2011
Wouldn't you know it. The latest numbers are out and now I'm the one that's late! Guilty as charged!
So what was in those numbers? Eh, it was a mixed bag with some good, some not so good numbers. Here's a rundown:
- NWMLS wide, there were 5393 pending sales reported. That's down 3.3% from the same period last year and up 23.7% percent from last month. Remember that last year at this time the market was being propped up by the tax credit. Being only 3.3% behind where we were last year is a minor victory. Compared to January 2009, we are up 23.9%
- NWMLS wide, there were 3207 closed sales. That's up 2.1% from the same period last year and down 27.6% from last month. I wish that number didn't drop so far from last month. But, I don't think it is a big surprise. Compared to January 2009 we are up 33.5%.
- NWMLS wide, the median price was $243,500. That's down 6.3% from last year and 4.5% from last month. Compared to January 2009 the median price is down 10.8%. The median price decline hurts. But, it's the least important of the statistics to me.
- Closer to my areas, in King County, the median price was $333,500. That's down 4.7% from last year and 2.6% from last month. Compared to January 2009 the median price is down 8.4%. Again, the median price decline hurts.
We can't compare the numbers from a January to the December before as the activity levels, prices, and everything else just don't match up. It just isn't fair. But, I do like to see where the trends are headed so I included the month before numbers here.
The only fair comparison is to the same period the year before and those numbers are there for you to see. However, last year is tough to compare against as the market was already being propped up by the home buyer tax credit at that time. So, I included the numbers from 2009 as a comparison as well.
None of the comparisons are perfect really.
The median price declines are disheartening. Truly. I am a homeowner so I hate to see that. But, as a Realtor I put more value in the activity levels of buyers and sellers right now. It speaks to the confidence and health of the market. The prices will follow. So, I like to see that the transaction levels are holding close to what they were last year and significantly higher than in 2009.
There are other items I like even more. I'll follow up with those next. In the meantime, let me know if you would like to see the numbers for your specific neighborhood or area.
Chris Loeliger
425.785.9217
Post a Comment : Author: Chris Loeliger
I Hate Bad Information (Information Junkie Part 2)
Posted on February 1, 2011
Ignorance is bliss!
You've all heard the cliche. While I don't entirely believe in that cliche I do believe bad information is worse than no information at all. (They are a little different in my mind, really!)
Take for example the latest release of the S&P/Case-Schiller Index covered by this news article. I'm sure the information is accurate. I have no problem with that. But it's old. Really old! The information in that article covers the housing market for November. A lot has happened in the housing market since the end of November let alone since the beginning of November.
That article reported that November prices for homes were down all over the country, Seattle included. Since that data is old, I think you deserve the most recent data, including December (and January's data is just about 5 days away), for some of our local areas. In fact, I looked at a bunch of areas starting with big areas and moving to smaller areas. So, here's all of King County.
This is the last 15 months of average sold prices (in blue) and median sold prices (in red) for all of King County. You're probably thinking to yourself that after 15 months the prices have neither gone up nor down a whole lot and you would be right. Note that, sure enough, the average price dipped in November, but the median rose. Or note that even more recently in December both the average and the median rose.
Zooming in a little bit, here's the picture of the last 15 months in Seattle.
Just like King County, the average for November is down slightly but the median is just barely up. Again, in December, the more recent data, the average is up but the median is flat.If we go East across Lake Washington to the Eastside the prices are up strongly in December.
For Area 540 (a smaller portion of the Eastside) the pattern holds true again with prices up in December
This pattern holds right on down to the the smallest level you can look at without there being too few houses to matter. Here are the prices on homes in Zip Code 98074 (mostly the City of Sammamish). Sure enough the prices rose in December.
So while the national media is still reporting on November's down data we already have data in hand showing that December was up! People, that November data is Bad Information!
One more cliche you've heard no doubt, Location, Location, Location! This one I do give a lot of credence to as it relates to real estate. Prices really do depend on your exact street, neighborhood, community, town or city. I've said previously that I am not concerned with prices. But, as long as the media is going to fixate on prices, report prices that are old and no longer accurate, or report prices from a national survey as if they apply to you personally I am going to fight back.
If you want to know what the prices are in your city, your neighborhood, your street or even your home, give me a call, shoot me a text, email me, tweet me, come see me in my office face to face (gasp!), whatever. I'll get you the exact details of the prices you want.
Chris
425.785.9217
Twitter: @cloeliger
Post a Comment : Author: Chris Loeliger
I'm an Information Junkie
Posted on January 25, 2011
I've said it before, I'm an information junkie. I don't always remember every single statistic and data point. But, I do like to have an overview of the most recent data and perhaps get a feeling for where the trends are going.
What's important to me is that the information is recent and pertinent. With an internet that apparently never forgets anything old data is really easy to come by. For instance, if you want the New York Stock Market's returns back in the early 1900's, it's here. Or perhaps you are a Monty Python fan and are looking for the speed of a swallow, it's here. Not to take anything away from bird watchers or from stock market analysts, but neither of those is really critical to me as a Realtor.
That's what drives me so nuts about the S&P/Case-Shiller Home Price Index of 20 metro markets. The S&P/Case-Shiller index is exactly what it says it is, an index of the home prices in the 20 metropolitan areas throughout the US. While that is critical to me as Realtor the index still fails on the timeliness issue. It isn't relevant by the time it is released.
Take the January 25, 2010 report as an example. This is the most recent report available and it was 2 months old already the moment it was released. The report only covers as recently as November. Doesn't seem so bad to you? Consider that I have already reported on the year ending statistics from December of 2010 here on January 6 and here on January 7.
I was able to make those reports not because I get special access (I don't) to the reports by being a Realtor. I get those reports just like the rest of the public about about 4-5 days after the end of the month when the NWMLS, that covers the Puget Sound area and the surrounding counties, releases a press release with the information in it.
We are about 10 days away from having the January 2011 data and the S&P/Case-Schiller finally got around to November 2010! My point is simply that the November data is no longer pertinent when we already know the December data and the January data is just around the corner. What's in that data that drives me nuts? That's next, stay tuned.
Post a Comment : Author: Chris Loeliger
Straight Talk from a Buyer
Posted on January 20, 2011
I missed this article from the Seattle Times when it first came out. Some colleagues brought it to my attention and I am so glad they did. The author does a great job of telling sellers exactly what they should be paying attention to from her perspective as a buyer.
You haven't followed that link and read it yet, have you? Or, if you have, you probably didn't read past the first screen did you?
I'll hit the highlights for you. I'll also take this opportunity to point out a few places that I have small disagreements:
- Selling a house is a full time job. Treat it that way, don't do a half-assed job of it and think you can sell your house in this market. You will be tired, frustrated, and stressed. You will have to spend money to compete. Speaking of that competition, you must to have your broker take you to see your competition. If you don't know your own competition how can you expect to beat them and sell your house.
- You need to hear the truth about your house from someone you trust. If things need to be repaired now is the time to hear about it and do something about it. If the paint is peeling, the toilet is leaking, the roof needs repairing or anything else, you need to take care of it now. It is a beauty contest out there and the ugly, neglected house is not going to win. Your broker is also a good source for this but I'll tell you that your broker may hold some back out of fear of offending you. Do listen to feedback from other brokers and the public.
- Don't be greedy. Don't 'stretch' for that high price. You won't get it and the consequences can be worse than starting at a smart listing price based on the analysis of the current market. Think of this as the "what you need" approach instead of the "what you want" approach.
- Be demanding. Expect the most from your broker and your brokerage. You should have the best photos and the best advertising. The same things you liked in the house when you bought it will likely be the same things the next buyer likes. Make sure they are highlighted in your listing and advertising. Ask for a broker's open to get the feedback of other brokers. The author suggests lot's of public open houses. I disagree here. I will do them until I turn blue in the face, but the chances of selling at an open house are minimal. Open houses are really used by brokers to find their next client, not to sell your house.
- Your broker should be giving you regular market activity updates. But there are a lot of resources out there. Make sure you stay on top of the current market.
- Should you be in the unfortunate situation of a short sale, deed in lieu, or foreclosure, know your options. I have provided just one source, there are many. Laws and license rules around the mortgage relief and short sale negotiation industry is changing fast. Beware of scams and trust someone you know for a referral.
- Allowing your house to look empty or neglected is an instant value killer. Buyers will assume you are in a tough spot (desperate) and negotiate to their advantage, for one. Additionally, remember how I keep harping on how this market is a beauty contest? The last thing you need is rain soaked phone books and power outage notices on your porch, overgrown bushes, grass that hasn't been mowed in months, burnt out lights or any other sign of neglect.
There are buyers out there and the author's points are simple and to the point. If your house isn't selling, you probably haven't done your homework and positioned your house in the best place to sell.
You see, one way or another this is nearly the exact conversation that I have on a regular basis with my listing clients. But, truthfully, the author does a better job of making her points than I do. You can be sure that I will be adding this article to the information that I take with me on listing proposals.
Chris
Post a Comment : Author: Chris Loeliger
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