by Dan Krell © 2010
If you’re going to sell your home this spring, “check your ego.” Having a high self esteem is a good thing; however, having an over-inflated worth of your home can cost you money and aggravation.
Listing your home at a realistic price can decrease the home’s “days on market,” and reduce the probability that you would have to significantly lower the list price down the road. Last year, many home owners who were unwavering in their belief that there home was worth more than what the market would bear found that selling their homes took longer and ultimately accepted a price much less than they had hoped. Other home owners who were determined to sell at the higher price eventually exasperatedly withdrew the listing.
Last week’s release of the Standard and Poor’s/ Case-Shiller Home Price Index for January 2010 (standardandpoors.com) revealed that home prices continue to fall; although the silver lining is that the rate of price depreciation is not as steep as it was a year ago. The composite index of 20 metro areas is down 0.4% from December 2009 to January 2010 and down 0.7% from a year ago; nationwide average home prices are at 2003 levels. The Washington DC metro area fared much better than other metro areas; Washington metro area home prices only fell 0.2% from December 2009 to January 2010, however home prices increased 3.5% from the same time last year!
Statistics reported by the Greater Capital Association of Realtors (GCAAR.com) support the findings of the S&P/ Case-Shiller Home Price Index. Average home prices for single family homes in Montgomery County fell between December 2009 ($480,931) and January 2010 ($451,255). Data compiled and reported by the Metropolitan Regional Information Systems, Inc. (MRIS.com) also substantiate these data, such that the median area home prices decreased comparing data from January 2009 to January 2010. However, home prices slightly increased in February 2010.
Many home owners remain confused about the unstable real estate market due
to ambivalence caused by the reality of a downward market conflicted with their own value assessment of their home. Needless to say, home owners may find it more difficult to come to terms with the reality that today’s depreciated home prices have fallen to 2003/2004 levels (as indicated by S&P/Case-Shiller Home Price Index), especially if they attempted to sell their home last year. Additionally, home owners are disserved by over-aggressive real estate agents who will say anything to get the listing; including telling the home owner that the home can sell at a much higher price, when the comps clearly suggest otherwise.
Obviously, selling your home is ultimately your decision. Since the decision to sell may hinge on many factors including the sale price, consulting with several different Realtors about neighborhood comparables can give you a good command over the neighborhood data as well as a realistic range of sale prices. If another factor of your sale is the purchase of another home, remember that real estate is relative such that the home you may purchase may be just as good of a buy as your home will be to another home buyer.
Clearly you should not sell your home if you are content living there. But if you are in the position to sell your home and want a successful sale- get out of your way.
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of April 5, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell