What Do You Think About Houses On The Market For Months?

 We had an interesting discussion at a sales meeting today, about what people think when they see a home that has been for sale for a very long time?  Or one that has been reduced in price over and over again?  The consensus answer was that it depends, of course.  

If you are a sophisticated buyer, and you look at the property on Zillow, you can see the history of listings and sales.  People who discover price change after price change often assume that the property was very overpriced, or that there is something really wrong with it. Other homebuyers, especially those who are not as internet-dependent, may never see the history; however, those people may also forget about the house completely, unless it gets brought to their attention by way of advertising a price change.

Sometimes a tortured listing history does mean that is was overpriced.  Because the listing agent is not always known, it could be a reduction due to listing with a new firm.  Sometimes, there is something wrong with a property, although usually a real problem leads in the end to lowered price.  The point is that we don't actually know why the price kept changing, or why the property didn't sell quickly, but we all draw our own conclusions.

Sellers sometimes take properties off the market and relist them, so buyers can see them again at the new price.  That doesn't always work though, thanks to the aforementioned price history.  So what's the answer?  Don't overprice to begin with, because a quick sale is always better.  And the first few weeks are the best time to sell.  And the first offer is often the best.  Need we say more?

Have It Your Way

The current plethora of informational sites displaying residential property reminds me of the old Burger King slogan:  Have it your way.  If you want alerts, apps, price ranges, school districts, agent ratings, or almost anything else, it's available on the internet, usually on multiple sites.  Even though Trulia is owned by Zillow, for example, they maintain two separate sites (clearly, it's easier to be a consumer than to be an agent trying to keep all listings and profiles updated!).  If you prefer one display over another, go for it.  If you like the search parameters of another site, have that one delivered to your inbox also. Want to know what an outside evaluator thought?  Check our Squeakly report. For those who choose to search through the site www.hpearce.com, we can wrap our contact information around the property data from the MLS. 

If you go back in time (I'm writing this on TBT), clients, who were then called customers--no buyer brokerage existed yet--had to come into a real estate office, to pore over a physical book of listings. That book came out every two weeks.  If you wanted to know what had sold in the past, and at what price, that was in another book, which came out every 6 or 12 months.  Books couldn't leave the hands of a Realtor, so there was no examining the inventory in the peace and quiet of your own home.  It's amazing to me, in fact, but more people log on to our site between 5 and 7 AM than at any other time.  They certainly weren't in a real estate office at those hours!

Given all of the options, it's easy to be overwhelmed by too much information.  Most people now know that Zestimates are off by 20%, on average, and more on the high end.  It's not surprising that outdated and expired listings appear in a Google search.  That's why, according to consumer studies, most buyers and sellers want to sit down in person at some point in the process.  That's why we're here.  Call us at any time--ok, maybe not at 5 AM, although I do get emails from agents at that hour--and help us add the "special sauce" that Burger King boasted of adding to the Whopper.  We call it market knowledge, and it isn't edible, but it is good!

We're Excited about Homesnap

The Connecticut Multiple Listing Service (CTMLS) is offering Homesnap to all of us now.  We think that consumers will absolutely love this free app, which is a cross between Zillow, Realtor.com,  and SoundHound.  That means that you can take a picture with your phone or iPad of any home you see; if it's not listed, you will get exterior and public information.  If it is listed, you will get what you would see on Realtor.com, all without having to do anything except point and click. In addition, by signing up, you can get updates every time something in your desired area comes on the market. If you sign up through an agent, it will be branded with that agent's info, and the agent will also have a record of what you're seeing.  This has the potential to make homebuying so much easier!

I've been playing around with the app this weekend, whenever it's too cold to do anything else--so I've clearly had a lot of time to spend!  I think this app will replace a bunch of others, since it combines so many great features into one delivery package.  At Pearce, we are busy training all of our agents on Homesnap, and we will soon be inviting you to come and join us.  In the meantime, you can certainly go on as a guest, and see whatever there is to see from the road, every time you have a few extra minutes.  If you're a fan of trolling on Zillow, this app's definitely for you.  I'm hoping that it will soon be available for commercial properties as well, but, for now, it's just great to have this new tool, in time for the spring market. 

Urgent Message to Listors and Potential Listors

Last month, I blogged about what I had learned from reading the new book Zillow Talk.  One of my primary takeaways from the book, which used statistics derived from the millions of real estate listings on Zillow to draw conclusions about best practices, was that there is a best and worst time to list.  The worst time--sometime in mid-December--seems obvious.  The best time, however, was a surprise:  30 days after most listings come on the market in the spring.  Why?  Because when buyers get serious, which takes them a few weeks after the spring market begins to heat up, they look for the newest listings, which are not the ones already on, but the new ones just entering. Those, therefore, are homes that have come onto the market just as people have begun to narrow and intensify their searches. 


Why did I mark this post urgent?  Because that sweet spot for listing--at least to get the most money in the fastest time, statistically--is now!  The authors boiled it down to "between filling out your bracket sheets for March Madness, and when the green jacket is slipped on at Augusta".  For those of you who don't follow golf, the green jacket-winning golfer at Augusta is crowned this coming Sunday. 


Now, I realize that there are always exceptions to every rule.  People who decorate well, and keep their homes neat all year, can do very well in December, when very little is on the market, and those buyers that are out there are very motivated.  Any given home can do well at any particular time, especially if it is well-priced, and in a good location.  However, if you want to play the odds, now is your time.  So beat the green jacket, and list this week!

Lessons from Zillow Talk

  I just finished reading the new book Zillow Talk, written by its CEO and its Chief Economist.  It was full of the Freakonomics type of factoids that I love.  Many I already knew, as would most real estate agents, but others were new to me.  Also, Zillow uses all of its data to quantify things we know intuitively.  They also use statistics, of course, to try to prove things we don't necessarily think are true.  That's the beauty of statistics!

We had a lot of fun at a recent sales meeting with where to bet on getting the most appreciation on a home (near Starbucks), what neighborhoods gentrify quickly (gay ones), and what real estate agents sell properties fastest (women).  It was interesting to note that, statistically, newer agents perform just as well as older agents.  The question that the figures don't answer is why that is.  Speculation ranges from the fact that they are more eager and have more time to devote, to the likelihood that newer agents are younger, and more technologically advanced.  Good to know, though, if you want to use your nephew.

One of the most striking propositions was that there is a best time to list.  We know that, of course, and always thought it was right about now.  When Zillow analyzed the sales data from all over the country, however, they determined that the absolute best time to list your home is about 30 days after the bulk of spring listings comes onto the market.  As they put it, "between the time you fill out your NCAA bracket and the time that the winner at Augusta slips on the green jacket."  That's important news for all prospective sellers:  Get ready to list at the end of this month, for best results!

New from New Orleans

Recently, I went for the first time in many, many years to the National Association of Realtors Convention, held this year in New Orleans.  Aside from sampling some great food, and looking at some lovely real estate in the French Quarter, I heard a lot about what's on the minds of Realtors around the United States.  In no particular order:

--Trulia and Zillow, while getting lots of attention, are no panacea--they are wildly inaccurate in many cases.  Although we know that their values are not too accurate, and consumers know that too, consumers don't seem to realize how many listings appear there when they are unavailable, or even sold.  Consumers do a lot of searches that turn up listings not matching our Realtor.com results.

--Technology for our industry is abundant, but often comes with a steep learning curve, or is incompatible with other programs we already use.  The Jetson-like devices I have been waiting to see are still not here.

--While the market is pretty flat for the year in most parts of the country, other places have largely said goodbye to short sales and foreclosures.  Hurry up, Connecticut!

--We have as much in the way of politics in our industry as you could ever imagine. I couldn't bring myself to get interested enough to get outraged about much of it!

--People come to New Orleans to eat.  And eat.  And eat.  And I thought New Haven was a foodie city.  It is, but it doesn't get the same tourism.  And I had no idea how many people take cruises out of the Port of New Orleans.  I guess that means I'm pretty sheltered, up here in New England!

Recent Statistics

There have been new indications that shed some light on what we may expect for a spring market in residential real estate.  It's been a brutal winter, but the February job numbers, which just came out, were not as bad as they might have been, and put Connecticut at 50% of its jobs regained from the lowest recessionary level.  This, of course, compares with 92% of jobs regained nationwide, after awful weather everywhere, but we welcome any good news.

Other recent studies predict that the Northeast is the likeliest region to see multiple bids on property this spring, suggesting that demand has been postponed due to winter storms, and will "pop" when spring arrives (will it ever come??).  Rates are edging up, which is another indication that time is of the essence for buyers, since monthly payments matter more than total cost for most people.

Another report from Zillow suggests that the West Coast is best for sellers, and the East Coast for buyers.  That's not surprising, since prices in Connecticut are still 23% below their peak in June of 2006.  It is yet another indication that our region will see strong buyer demand.  Since the listing inventory is delayed, again by weather, supply may be tight.

In our office, we've been getting reports of greatly increased web traffic to our site, with strong demand for certain types of searches by buyers.  Again, that would seem to indicate pent-up demand.

My crystal ball is a little cloudy, but my outlook, based on all of the above, is positive!

Referrals Everywhere

It's been a busy few weeks for people calling me to ask for help in selling real estate here and elsewhere. After all the talk about the Internet as a way to sell real estate oneself, and all the fears about the demise of our profession, it's heartening to see how many buyers and sellers out there know that they can use our help profitably. Even though all the studies show that the vast majority of transactions are done through real estate companies, there is a perception that that time has passed. It is true that the information buyers need can now be found online in many cases. What isn't true is that buyers don't need assistance in interpreting the data, in learning about a region, and in structuring an offer. And sellers are much the same. I've heard some talk about using Zillow to price a property, although it is very unreliable in certain areas. I've also known people who do their own marketing and even open houses. Much more often, though, I've heard people say how much they value having an intermediary in the negotiations, especially when they know the other party. What would seem to be an advantage--familiarity with the other side--makes most sellers and buyers very uncomfortable. The addition of professionals is highly comforting. At a time when saving money is chic, the use of real estate agents and agencies is a clear sign of their value. And you get what you pay for. As they say about lawyers ("he who represents himself has a fool for a client"), so goes the saying for sellers and buyers.