In South Orange as of November 5th, there are a total of 65 Listings for Sale. The good news is that 9 of these properties are showing as having accepted offers. The not so good news is that 22 of these properties—over 1/3 of the actives on the market—have had their prices reduced by as much as 20%. Interest Rates are on the rise and the stock market has been a little jittery. Yet, Jeffrey Otteau, NJ Real Estate Expert and Leading Appraisal Company for the State of New Jersey expect the market to stay healthy enough for another 18 months. He claims we should expect to see a slowing of the rapid growth rates in prices, but we shouldn't expect to see overall declines for a time. He claims RIGHT pricing is even more critical now, more than ever.
In the meantime, if you are listed on the market, what should you do?
Here is an example of a situation and the advice is quite spot on—run the numbers for your particulars.
In the early 1990s, the luxury market in Beverly Hills, Brentwood and Bel Air took a 33 percent drop in about six months.
In the midst of this price plunge, one set of buyers offered $1.1 million on a property listed at $1.35 million.
The Seller countered at $1.325 million and told the buyers they were firm on that price. The buyers raised their offer to $1.125 million but advised that they were unwilling to go any higher because prices in the market were declining so quickly.
The Sellers advised that they would wait for another offer.
At that point, research showed that there was about 60 months of inventory on the market in that area — that’s the equivalent of five years of inventory, based on the total inventory and the rate at which the number of homes were being sold.
More specifically, the analysis showed the following:
1. The rate of absorption was 1.6 percent (1 sale every 60 months). In other words, the probability that the property would sell was 1.6 percent in any month, and the probability it would not sell in a given month was 98.4 percent.
2. At the time the offer was submitted, the rate of decline in prices for the previous six months was 3 percent per month. Consequently, each month their property stayed on the market, it was losing $40,500 in value ($1,350,000 x 3 percent).
3. As an example, if it took them another six months before they received their next offer, their property would have declined by $243,000 and would be worth $1,107,000, $18,000 less than the buyer was offering.
4. In addition to the price decline, they also had the carrying costs including property taxes, insurance, HOA fees, etc.
After careful consideration, or reconsideration, the Sellers recognized the risk, and the transaction closed at $1.125 million.
To prosper in a down market you must be able to show your sellers the benefits of selling now and locking in a price rather than taking the risk that their property will be worth less if they wait.
Working with the rate of absorption and the months of inventory on the market is one of the most effective ways to do this.
Cited example above was shared by Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.
Mark Slade
Keller Williams
917.797.5059
Good Homes
Selling a Maplewood/South Orange/West Orange area home involves many steps and having an experienced Maplewood New Jersey Real Estate Agent and Realtor®, specializing in the Bedroom Communities of New York City in Essex/Union County— Millburn, Short Hills, Montclair, West Orange, South Orange, Livingston, Maplewood, Springfield, Summit, Madison, Chatham, Scotch Plains, Fanwood, Cranford and Westfield--by your side will make the transaction run a lot smoother. I would love to be your Maplewood/South Orange New Jersey Area Real Estate Professional! I assist both buyers and sellers in the Bedroom Communities of New York City, mostly served by NJ Transit’s Mid-Town Direct Train Lines, offering commutes of 45minute or less to NY Penn Station, with either the purchase and or sale of residential real estate.
As an Accredited Buyer’s Agent (ABR), I have received special training to guide and educate you through the entire home buying process. From start to finish, I listen to your needs and desires in what you would like and take the information you give me to find you home. My GO-TO team can provide you the best in Real Estate advice with regard to attorney choices, Home Inspectors and Mortgage Loan Officers
I am also a Luxury specialist (CLHMS), I have received special training to guide and educate you through the entire home buying and selling process. Not only does this extra training help me better understand this upper echelon in real estate, its benefit include a special luxury website: www.njluxhomes.com and a corresponding worldwide luxury network that helps to put luxury buyers and sellers together.
As your Maplewood/South Orange/ West Orange New Jersey listing agent I am well versed on as your local expert in all things in the West Orange, Maplewood and South Orange area Real Estate Market. You can expect personalized service that includes a detailed consultation on how to best position your Mid-Town Direct home to be competitive in today’s market with training to provide my clients with an in-depth Advanced Comparative Market analysis, and advice on staging. As my office’s technology officer as well as both a Zillow Platinum Premier and Trulia Premier agent, I use the latest and most up-to-date marketing methods to get your home in front of as many buyers as possible. Being your New Jersey Real Estate Agent and Realtor ® not only involves just finding the home or selling the home, but being your guide, negotiator, advisor and advocate and making sure that your needs and goals are met. Being your New Jersey Essex/Union County area Realtor® (with a little bit of Morris County thrown in for good measure) is one of my truest passions, and “Helping You Find Your Dream Home” is my number one priority.
Don’t forget These Helpful Sites:
For Open Houses:
www.maplewoodnjopenhouses.com
www.southorangenjopenhouses.com
and
For Homes For Sale:
www.latestmaplewoodhomes.com
and
www.latestsouthorangehomes.com
Mark Slade
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