This will probably be my only post this year that addresses value in this particular price range.
Why? Well, because most of these properties are not worth buying…
But, this one is…
for the right price.
This one belongs to one of my clients, who needs to short sell this house in Oakland City – I listed it for $9000 in September – it remains unsold.
We are relisting the property soon, and I am thinking that $4000 is the right price. His mortgage lender may differ with me, but I let them set the $9000 price back in September. No offers followed!
Some of you may be thinking – huh? what? Is he really talking about this like it matters? Well, my client matters – he needs this short sale!
So, check out these FMLS statistics – 8854 houses sold for under $50,000 in Georgia last year, 1422 in Atlanta, 147 in 30314, 265 in 30310, and 205 in 30315.
363 houses sold for under $10,000 in Georgia last year, 266 in Atlanta, 39 in 30314, 73 in 30310 and 47 in 30315.
Only 4 houses sold for under $10,000 in Decatur’s 30032 – the most downtrodden Decatur (unincorporated Dekalb) zip code. 285 houses sold for under $50,000 in that zip.
Now, looking back just one year, there were 6279 residential properties sold in 2010 in Georgia for less than $50,000. That means that there were 2575 more sales last year for under $50,000 than there were during the year before.
There is a seller’s market in this price range, for the most part, so why did the $9000 house not sell quickly?
Because it is overpriced by 50%. Because, for $9000, on the edge of Oakland Park, this house is overpriced. Simple, right?
To relate this phenomenon back to any other price segment of the market, I simply suggest that the street matters most, and that chasing the market is never good, especially when about 7-8 other houses per month are selling in the same zip code in the same price range.
Check this out and see how well this carries. On any given listing at higher price points I can probably find the same basic statistic – 7 or 8 other houses will sell nearby that month, while the overpriced listing languishes.
This will be my last article about houses in this price range for a while, but I’ll continue to make these same points about value. Because, most real estate listings are still initially overpriced and either chasing the market, or failing to sell. Lets use the bottom of the bottom of the real estate market to remind us that pricing matters most!