What To Do In A Cooling Housing Market
The “bursting of the real estate bubble” appears to have become a soft landing for the real estate market. In most markets around the country, prices are dropping but they’re not plummeting. Homeowners with years’ worth of equity will still hold onto much of that equity and buyers are finding that they have a chance to buy a home again. In the business, we call this a “correction.” It’s normal and even desirable.
However, a cooling market demands some different strategies for both buyers and sellers. Sellers have to avoid the pricing “hangover” from the boom market, when they could throw a For Sale sign in the yard, slap any outrageous price they liked on their house and get twenty offers in as many hours. And buyers must lose their desperation, understand that they are more in control and realize that the current market is one of shopping for a deal, not throwing money in panic to avoid “losing the house.”
Here are some tips for sellers in a cooling market:
1. If you must sell, focus your money and effort into creating curb appeal. Curb appeal alone can sell a house. The number one feature of a home in terms of cost versus effect on salability is front yard landscaping. Lay down sod, plant flowers, paint and put in a flagstone path.
2. Be realistic with your goals for price and timeline to sell. Houses in much of the country are NOT selling at asking price and are staying on the market longer than in recent years. Many sellers have not yet come to grips with this new reality.
3. Don’t set yourself up to fail, set your price aggressively compared to your competition and come up with creative incentives to attract a buyer, such as sharing some closing costs or including some high-quality furnishings in the sale.
In general, the common sense rules apply whether you’re buying or selling and whether the market is hot or cool: Educate yourself about the market, have specific goals in mind, understand what your financial resources are, and don’t make any deal for the short term. In the long term, real estate is always the best investment around.
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