On September 19, 2005, 10439 Summershade listed for $389K. A nice, single-story, three-bedroom, two-bath, two-car garage home in a tightly packed cluster neighborhood amongst hundreds of others in Double Diamond… who wouldn’t want it?
The listing expired shortly before Christmas. After the holidays, the same agent relisted it on January 10, 2006, for the same price. On March 29, it came off the market. On May 12, it came back on at $369K.
Now I’m not sure the trail of reductions that may have followed… All I know is that on a September 15th daily email alert, I noticed that the price had come down to $299,900. A new low for the neighborhood. On September 18th, the house went pending no show (that rare sign of a solid deal).
If this seller had priced the home more competitively last year, he/she would have sold faster and netted more. You cannot price a home on what you need out of it. You must priced based on what the market will bear. And right now, that’s not much.
gotlots
“You cannot price a home on what you need out of it. You must price on what the market will bear.”
Gee, that’s exactly what I posted last night.
Reno Ignoramus
“U.S. homebuilders, including Pulte Homes, Inc., Lennar Corp. and D.R. Horton, Inc. are cutting prices and throwing in a lot more than the kitchen sink to stem a record build-up of unsold houses, even as their profits and shares tumble.”
“Builders are paying closing costs and a year’s worth of monthly mortgage bills to lure buyers, says Joshua Cohen, an agent in Las Vegas. ‘We’ve seen a huge upswing in supply and a huge decrease in demand’, Cohen says. ‘The builders will do whatever it takes to move a property'”.
Bloomberg
September 27, 2006
The builders will continue to build until their margins are reduced to zero. Virtually every large homebuilder in Reno is a publicly traded company, and they have to continue to build to generate income and profits, albeit substantially reduced profits from two years ago. They have enormous capacity to continue to offer ever increasing incentives and outright price reductions. And now more and more are offering comissions to realtors.
The builders are going to crucify the resale market. How do Mr. and Mrs. Joe Sixpack compete on price with Pulte and Lennar and Horton?
Wazzup
The UCLA Anderson Forecast is being presented today. Should be some interesting reading this evening…
8:05-9:05am
I. National, State and Regional Forecasts
How much and how long will housing slow the economy?
Would a recession bring down energy costs?
A Fed pause, but for how long?
Is there another locomotive to pull the economy forward?
Is the chance of a recession becoming significant?
California’s slowing economy: Outside of housing, there is some good news…
Who’s hot and who’s not: Regional trends in 2006
Edward Leamer, Director, UCLA Anderson Forecast
Ryan Ratcliff, Economist, UCLA Anderson Forecast
David Shulman, Former Chief Strategist, Salomon Brothers and former Head REIT Analyst, Lehman Brothers,