San Francisco Real Estate - Residential

Realtors Blame Sellers for Housing Woes

This article is a week old from NewMax. There is some truth in what is being said here, though it only applies to some of the more stubborn sellers. After the long run up of real estate in the San Francisco market, people have become accustomed to multiple offers over the asking price. We are still seeing some multiple offers in our office on a few very select properties, but nothing like in the past. Here is what the article says.

- Mick Orton
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Realtors Blame Sellers for Housing Woes

9/8/06 - Realtors pointed their collective finger at home sellers for the slumping housing market. They say that sellers are refusing to cut prices to attract prospective buyers. As a result, the National Association of Realtors dropped its sales forecast for the year.

"Sellers are more stubborn than I expected," said David Lereah, the NAR's chief economist. "For five years in a row, it was a seller's market. They were calling all the shots, and they got accustomed to it."

The NAR now says sales of existing homes will fall 7.6 percent this year. That’s much worse than the 4.4 percent drop it called for in January. Sales of new homes will plunge 16 percent, predicts the NAR. In January, the NAR said new home sales would fall 6 percent.

Because sellers are holding out, the NAR expects that prices will rise above last year’s highs. However, the NAR expects prices to start falling within months as sellers become more anxious. It points to the record 3.86 million homes on the market or a 7.3-month supply.

The national median existing-home price for all housing types is expected to grow 2.8 percent this year to $225,900, with the median new-home price rising only 0.2 percent to $241,400, says the NAR.

"Folks are still thinking they can get top dollar for their homes," says Tom Rath, an agent at Re/Max Premier in Ocala, Fla., to USA Today. "I don't think reality has set in."

Prices for new homes aren’t rising as much because builders are offering incentives to reduce inventory, according to the NAR. Yesterday, three builders acknowledged that they are giving away free upgrades such as granite counter tops, pools and vacations to lure buyers.

The NAR does say that home prices should level out after they correct. According to Lereah, "Home prices should return to positive territory within a few months and annual appreciation will be slower than historic norms."

"Keep in mind that over time, home prices rise at the rate of inflation plus one-to-two percentage points - buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages, but people who purchased last year with the intent of flipping are likely to get burned," he (concluded).

- NewsMax

posted by SFResidence.com @ 7:42 AM