Tucson Real Estate Blogs » Price, Price, Price. What Are Some Sellers Thinking?

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Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
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Price, Price, Price. What Are Some Sellers Thinking?

Attune to location, location location, is pri$e, pri$e, pri$e. The Tucson real estate market is overwhelmed with overpriced homes. Two examples, first is a home I showed my clients yesterday. Lovely homes, well maintained, great location. Everything in this gated community in Oro Valley is selling for an average of $153 a square foot with a low of $136 and a high of $162. OK, square footage is not the gospel, but, it is a good bench mark to start with. The seller is asking $242 a square foot.

Second home, again in Oro Valley. The seller is asking $254 per square foot. Average sales have been $181 per square foot with a high of $197 and low of $172. Wonder why its has been on the market for over 280 days? The sad thing is the owner and seller is a real estate agent.

Now this is the same market where I read about a seller who put his home on the market $10,000 below the market, sold it over six months later for $18,000 below that. Though there are some reasonably priced homes on the market, there are too many that have inflated prices that have nothing to do with value. These are the homes that are putting the market in a spin.

This morning I read the cover article from the Arizona Daily Star about the current Tucson housing market. That there are too many homes on the market that are over priced, and too many agents willing to list them. I may not have the most listings, but, the homes I have listed are priced right.

I want my client’s homes to sell, not have my name all over the place with a reputation for not selling homes. I have checked a few of the homes that I lost the listing to months ago. Guess what? They are still on the market with the agent who listed them at the higher price the seller insisted on.

“Now that the market has slowed and shifted in favor of buyers, many sellers are making the situation worse by holding out for top dollar, analysts said.” As quoted from the Arizona Daily Star. Marshall Vest, an economist at the University of Arizona’s Eller College of Management was quoted as saying, “In this market you have a number of sellers who have a greatly inflated perception of what their home is worth. Eventually, those sellers will either come to their senses and lower their asking price, or they’re going to take the homes off the market.”

It all boils down to basic economics of supply and demand. If the supply is high and demand is low or unwavering, value decreases. If demand is high and supply is low, prices will increase. Basic economics, not want, not need, not desire. Simple understandable economics.

Unlike parts of the Midwest and northeast, Tucson’s median sale price has remained stable. While new home prices reduced by 5% in March 2007 as compared to March 2006, resale home value actually increased. Tucson’s stronger economy and population increase has benefited the real estate market.

Sales for April are relatively strong, though my prediction of 1,438 sales for the month is yet been seen, as of the date of this writing there have been a reported 1,280. The numbers won’t be in for at least another week or two. That will be another blog. March had 1,348 sales while February and January, much slower months, had 1,022 and 971 home sales respectively. May, June and July are traditionally stronger months for home sales in Tucson. It begins to taper off a little in August and gradually reduces until March again. That’s just traditional sales. It doesn’t mean that the market has changed, its just part of the cycle.

To help the market regain its strength sellers must be reasonable. They need to ask themselves serious questions:

Do I need to sell now? If the answer is no, then wait for the market to correct itself?
Do I need to get, not want to get, X dollars for my home? If the market will support that need, sell it. If not don’t sell it. The amount that is owed on a home has nothing to do with its value. It�s what buyers are willing to pay that sets the value.
What concessions am I willing to make to sell my home? If the answer is none, then it shouldn’t be on the market.

Too many times I have heard that so and so is selling their home for X dollars. That�s what I want to sell mine for. My question is, “Has it sold?” Even what a similar home sold for 3 months ago may not be what buyers are willing to pay today. With a market that is overwhelmed with homes for sale sellers are being forced to sell for much less than they wanted.

Tucson’s real estate market has always been and remains to be one of the strongest real estate markets in the Nation. We are just going through a bump in the road. With many baby boomers retiring between now and 2016, Tucson’s market will remain strong for many years to come.

So, Sellers, if you need to sell your home now look at the �SOLD� prices with your REALTOR� to find the best price based on �sales� and the reasonable amenities of your home that buyers will appreciate not because you as the seller think it adds value. If you don�t need to sell now, take it off the market until the time is right for market prices to match your needs. If you leave it on the market in Tucson, know that roughly 1.3 homes out of 10 will sell each month, and with new listings you will start over with that statistic each month. How bad do you want to sell your home?

This entry was posted on Sunday, May 6th, 2007 at 7:08 pm and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

[…] Sales would be higher if some sellers were more reasonable with their prices. Buyers are showing that they are willing to buy. They are not willing to pay an inflated price. The numbers above do not reflect all the offers that have been written and the seller could agree to a reasonable sales price. Reality is beginning to sink in though. In Price, Price, Price. What are some sellers thinking? I addressed the issue of reasonable pricing of homes. […]

May 11th, 2007 // Tucson Real Estate Blogs » Blog Archive » Who Else Wants To Know Homes Sales In Tucson?
[…] honesty and the courage it takes to explain the market as it truly is and not what we wish it to be. This is the area where a good and confident REALTOR® will choose to work with a seller or walk away. It’s not a matter of being arrogant, it’s a matter of confidence. Years ago, when I first started in real estate, I would list nearly anybodies home at whatever price they insisted because I needed listings. Today, I have more confidence, have a reputation to maintain (that other REALTORS® recognize as not routinely over pricing…that prices are reasonable), and have a solid handle on the market. Today I stay away from listings that are over priced Market Rejected Expirations just waiting to happen. […]

July 23rd, 2007 // Tucson Real Estate - Home Selling 105

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