While Prince George's County sellers are having trouble adjusting to the change in the market, buyers also need to realize that  the market is more stable than they think. Where sellers are often unrealistic in setting their asking price, buyers are asking "how long should we wait for the prices to drop?" and, by waiting, are missing out on good houses.

I've found that it's important to find out what buyers are waiting for -- asking prices to drop or values to drop. Asking prices are coming down all the time because they are starting out too high. However, values are showing remarkable stability. I remember when it possible to get a "steal" and for the most part, we're not in that market.

The following is a common scenario: A few weeks ago, there was a house on the market that was priced very well from the start and it didn't last long. I spoke with a buyer recently who was distressed that it sold so quickly.

Buyers missed out on that house because they were "waiting".

(C) 2006 Susan Pruden.

Yesterday we discussed the changes in the real estate market here in Prince George's County. The news isn't dismal -- we are still seeing decent appreciation over last year's market. What we are not seeing is appreciation over last month's market. As a matter of fact, the market has remained remarkably steady over the past few months in terms of price. Where the dramatic changes are is in the number of days it takes to sell a house, the number of houses on the market, and the number of houses actually getting contracts.

So, what's a seller to do?

Last year, a seller could decide on Wednesday to sell his house, do very little fix-up, go on the market on Thursday, and sell by the next Monday or Tuesday.

No more.

With so much more competition on the market, sellers have to be more careful than ever about the prices they're asking and the condition of their houses.

So, 1) realize that your house is a commodity. It is worth only what the best buyer is willing to pay for it. AND THOSE BUYERS HAVE SEEN ALL OF YOUR COMPETITION!!! I cannot emphasize that enough. The buyers know exactly what else is on the market, the condition of those houses, how long they have been on the market, how many times the price has changed and how your house compares in all of those categories.

2) Your house, since it is going to be compared so ruthlessly to the competition, must stack up well to get the best price. This means you cannot price yourself with houses that have fabulous updated kitchens if yours was last updated in the '70s. Buyers will look at your kitchen, assume a minimum of $20,000 to update and 1) decide that your house isn't worth it, 2) decide that they can't afford both your price AND the updating or 3) they'll make a very low offer, which buyers don't like to do. So put your best foot forward and realize that you can't compete head to head with a house that is in better condition, is larger or is priced better.

Last time you bought a car, did you comparison shop? Did you check prices at other dealerships and look at what you got for your money? If you did it for something that costs as relatively little as a car, what makes you think that buyers aren't doing the same thing with your house? You must price it right for the condition and for the market.

Buyer's today are not feeling any pressure to make an offer. There are too many houses on the market and more coming on every day. They are, however, willing to give fair price for the value.

(C) 2006 Susan Pruden.

Yesterday, I promised some more statistics on the market in Prince George's County.

A year ago September, we had a measley 1700 properties on the market. September 2006 - just shy of 3700. This means you, Mr. and Mrs. Seller, have way more competition than you did last year and the year before. To make matters worse, the number of houses that are actually getting contracts has been dropping steadily since last March.

So, in September 2005, we had around 1700 listings and 1200 ratified contracts.

In September 2006, we had almost 3700 listings and only 900 ratified contracts. That's a staggering 118% increase in the number of houses for sale and a 14% drop in ratified contracts. And it is in this atmosphere that sellers are asking higher and higher prices.

That math just doesn't work. So no wonder it's taking longer to sell a house!

Tomorrow - What's A Seller To Do?

(C) 2006 Susan Pruden.

Okay, so I'm not really Chicken Little.

In Prince George's County, prices are falling from their lofty starting point, but not below last year's prices for the same period.  We're still seeing appreciation over last year, just not over last month.

The average sales price in Prince George's County for 2005 was right around $330,000. As of September , our average sales price for 2006 is just shy of $368,000. However, our average asking price is $430,000! That means there is a disconnect somewhere between what sellers are asking and what buyers are willing to pay.

Ask most real estate agents and they'll tell you that sellers just don't get that the market has changed. The change is that houses selling today won't get more than their neighbors got, they'll get about the same. But sellers are still adamant about asking for more, with the idea that they can always come down, or that a buyer can always make an offer.

Two things happen with that mentality -- 1) buyers look at the number of days that houses have been on the market and automatically discount the asking price, figuring that the seller must be getting desperate and 2) if the house is priced above the market, the buyers who are looking for that house may never even know it's on the market -- they're looking in a lower price range. If they could afford the seller's price, they'd buy a bigger (or better or more updated or more something) house!

More statistics tomorrow -- it has to mean something!

(C) 2006 Susan Pruden.