What a difference a year makes.
The Roaring Fork Valley's real estate market has finally hit some extended tough times. And the future looks a bit uncertain, depending on how quickly asking prices are adjusted to find where the buyer interest actually lies.
Real estate sales activity actually "peaked" last summer, and as the buyer activity began to gradually taper off last July, sellers that were expecting to find what had become a normal pattern of escalating prices and strong buyer demand were greeted with a strong dose of lackluster activity.
And as the slowing of buyer activity gained momentum into the fall, the next wave of new listings entered the market, also priced with the anticipation of the usual continued growth in their equity that we have all come to expect, rather than the unexpected fall-off in prices.
This trend has continued to build through the winter and spring, and has grown to such an extent that the amount of "FOR SALE" inventory is at an uncomfortable level for some, and to a level never quite seen before to many in the valley. Buyers, for the first time in recent memory, are having the luxury of finding some sellers that are willing to entertain offers substantially less than their asking price, if they're lucky enough to get an offer at all.
Our market is a shining example of supply-demand economics at work. Whereas the general formula of simply pricing a home based on the average "price per square foot" of other homes for sale in the area and putting up a "FOR SALE" sign in the yard was sufficient to attract buyer attention in the recent past, sellers are now learning the hard lesson that this general pricing formula not only does not work effectively with this amount of inventory on the market, but it can substantially start a seller's journey dramatically overpriced.
Sellers today, more than ever, need a good Realtor who knows and understands the art of specifically pricing a property to attract today's buyer, that is experienced in both negotiation and home preparation prior to being put up for sale, and that also has a comprehensive marketing plan that is directed to find buyers for their home.
This summer, sellers who have ignored the change in the market and have held on to the 2007 pricing levels and strategies are finding very little buyer activity, if any at all. In 2008, property owners that are expecting to get to a closing table are learning that pricing their homes based on current comparable sales rather than other sellers' now unrealistic asking prices is crucial. There are still buyers willing to buy property here, but only the realistic seller that acknowledges that 2008 is a different climate from 2007 is finding the closing table.
Sometimes the hardest lesson for a seller to admit in a declining market is that times have changed, and then to sufficiently adjust their price expectations. With so many choices available today, a broker working with a buyer is now given the luxury of picking the properties that reflect 2008's adjusted pricing, and therefore have a higher chance of selling. The seller that takes the "let the buyer make me an offer" strategy is often left sitting on the sidelines watching the game be played by others. As each month passes without an offer, the price reduction required to get into the game only gets steeper.
When does the market finally rebound and begin to correct upward? Some buyers looking for that answer have been reluctant to make offers for fear of not letting the market "hit bottom." But that reluctance often leaves their first and even their second choice to the buyer that acknowledges that the market is in a constant state of fluctuation, and that the Roaring Fork Valley over time has a better track record of going up than going down. The properties with the best location and that are in the best condition always end up being the ones that sell first.
We work and live in one of the most beautiful areas of the country. The Roaring Fork Valley buyer and seller that listen to, and are influenced by, the logic of the situation rather than by its emotion will find investing in our real estate commodity a pleasant and prosperous experience. And they will also enjoy the benefit of living here while it all happens.
Greg Hunter is the sales manager for Morris & Frywald Real Estate.
Comments
aspen real estate
KNCB Moore
What will the impacts be ? first, any jobs lost in the real estate
industry ? Any property tax collection problems ? An increase in the number of foreclosures ? Are our 30 some property taxing districts having budget shortfalls ? Are population numbers declining and vehicle ownership decreasing ? School registrations falling off ? Advertising in decline ? Local newspapers losing readership ? Answering these and more questions is a job for the Chamber of Commerce that isn't political although the City Council and the BOCC may think otherwise. You do
not see the govnt planners publishing quarterly reports on the local economy. And the joke is that the planners are now in the Economic
Development Dept.
Be Brave Comrades. kncbmoore