Archive for Sunday, February 12, 2006

Homes lingering on market

Higher-priced houses taking longer to sell

February 12, 2006


After more than four months on the market, a home near the end of Chouteau Court is still looking for a new owner.

The previous residents moved out of state more than three months ago, leaving the place - on a double-and-a-half lot with a fenced backyard, a security system and a partially finished basement - adrift in the market.

A relocation company now holds the title, and the home's new real estate representative wants to sell it.

"It's a real good home, but it wasn't ready for the market," said Tex Harrell, a Realtor with Stephens Real Estate, who took over the listing two weeks ago. "We're working to get that done now."

It's a story that's being repeated more often these days, as what had been a red-hot housing market continues to see movement but at nowhere near the breakneck pace of recent years. As mortgage interest rates creep higher, financial uncertainties mount and more homes go up for sale, buyers are finding that they can afford to be choosy.

Homes such as this one, on Chouteau Court, are spending more time on the market this winter, as buyers have more listings to choose from and more reason to be concerned about their money. Owners stand the best chance of making a timely sale if they have their properties priced correctly, in good condition and open for showings upon demand, Realtors say.

Homes such as this one, on Chouteau Court, are spending more time on the market this winter, as buyers have more listings to choose from and more reason to be concerned about their money. Owners stand the best chance of making a timely sale if they have their properties priced correctly, in good condition and open for showings upon demand, Realtors say.

Some homes that would have spent a week or two without a contract two years ago now can linger on the market for several months or more, Realtors say. The moves come as homes in upper price ranges - particularly $250,000 to $500,000 - are in plentiful supply.

The home on Chouteau Court started near that level, priced at $240,000, but since then has been marked down to $229,000.

Many sellers hope to land a high price and won't hesitate to list a property for $5,000 more than the market typically can support, Harrell said. They figure that if it sells, great.

But most homes that sell quickly go in the first three weeks, he said. After that, it's a slippery slope.

"If you don't have it priced right, you really can lose a lot of your market in the first two weeks," said Harrell, who has been selling homes in town for 11 years. "People go on their way and they won't be back."



Homes in Lawrence, including townhomes, spent an average of 113 days on the market in 2005, according to data from the Multiple Listing Service used by area Realtors. That was up 14 percent from a year earlier and the longest stretch from listing to closing since 2001.

New construction accounted for much of the increase, with new homes and townhomes spending nearly twice as long on the market - 221 days, on average - than the average listing. The timeline for new construction was up 21 percent from a year earlier.

Mike McGrew, vice chairman for Coldwell Banker McGrew Real Estate, said that sales in new construction typically were taking longer in the $350,000, $400,000 and $500,000 listings.

"We're seeing more birthdays," said McGrew, referring to the informal term for homes on the market for at least a year. "In the real estate business, we don't like birthdays on properties - and if you're a builder, that's especially true."

But even existing homes are lingering longer: 87 days last year, on average, which was up 12 percent from 2004.

Steps for avoiding a lengthy listing

Want to sell your home as quickly as possible? Keep these tips in mind: 1. Price right. A home priced too high may turn off many potential buyers, especially with so many other homes on the market. 2. Clean. Few things turn off interested buyers more than cluttered rooms, soiled floors and messy kitchens. Keep rooms open and clean. 3. Paint. Scuffed walls and messy paint jobs also can turn heads the wrong way. Do the work right or hire a professional. 4. Update. Damaged carpets, cracked tile and scuffed hardwood floors rarely cut it anymore. Repair or replace. 5. Be flexible. Adjust your schedule, if necessary, to accommodate requests for showings. You don't want to lose out to another seller down the street.


just_another_bozo_on_this_bus 12 years, 2 months ago

It sounds to me that homes at the upper end of the scale have been overbuilt. So the shortage of building lots developers complain about is really a result of bad business decisions on their part-- think how many smaller, affordable houses could have been built on the same amount of land.

But I'm sure we'll hear that must be the fault of the "anti-growth" sentiment of the city commission, right?

karmaxs3 12 years, 2 months ago

We just sold our home, by owner, in 17 days. It was over $200,000. I guess when you get greedy you have to wait...

just_another_bozo_on_this_bus 12 years, 2 months ago

Between you and me, C-man, you should take an English class.

In this case, the market really can't correct itself. Land that could have been used to address the shortage of affordable housing is now inhabited by McMansions that no one wants.

So what do the developers who made these bad decisions do? They complain about the city commission wanting to take its time and consider carefully how to locate the new $76 million dollar sewage treatment plant (largest investment in the history of Lawrence) that will bail them out of their own screwup.

That's not a market correcting itself, it's the taxpayer picking up the tab for bad business decisions.

usaschools 12 years, 2 months ago

If your home isn't selling, that is the market telling you that it is priced too high! Real Estate brokers/agents became too greedy last year. In March, when the real season gets underway, home after home (particularly desirable older homes in established neighborhoods) were brought to market at ridiculous prices. Many homes in Pinckney and Old West Lawrence sat and sat and sat.

If you want to buy, find an agent with some ethics. One who will NOT agree to represent both buyer and seller (legal, but hardly ethical). Don't sign any kind of agreement with the agent while you are just looking. Find an agent willing to show you property for sale by owner (but be honest and be willing to pay the commission if you buy such a home). Find an agent who is looking out for YOUR interests, not their own. For example, I had an agent tell me that a home I looked at would sell "in 2 to 3 days tops" and that I should make "at least a full price offer." My wife and I felt the home was tremendously overpriced and found another agent. The home sat on the market for 3 more months, finally selling for more than $55 thousand dollars LESS than the original price! That agent was looking out for himself, not for us.

formerlyKS 12 years, 2 months ago

Just be glad you're living in a cheap market in comparison with the rest of the country. As a former resident of inland California (now coastal California), it was amazing that in an area with horrible air pollution, low wages (yes, even lower than Lawrence/Topeka/KC), tons of illegal aliens, and very high unemployment, people WERE willing to pay almost anything for a house. Now, the hottest markets nationwide have gone cold and speculators ("investors") are bailing out right and left. A few have even headed to Kansas is search of cheap real estate. Prices on the left coast will fall rather dramatically over the next couple of years as foreclosures force the leveraged out. I don't know what affect this will have on prices in middle America, but my bet is they will be pretty stable. Really, $250K is not a bad price for a nice place to live. Two professionals should easily be able to make that payment (at least at 6% 30 year). When you see shacks in nowhere California going for twice that and their owners telling you that "real estate can NEVER go down," you know where this is all headed. Anyone see the comparison between day trading stocks in 1999 and flipping houses in 2005?

shanefivedyes 12 years, 2 months ago

Im starting to suspect bozo of being my high school english teacher, you know Bozo the one that flunked me,the one that GRADED every paper twice and took great delight in all the F's that she issused. Is that you Mrs. Lewis?

Richard Heckler 12 years, 2 months ago

Please all keep in mind that when we speak of affordable housing what exactly is the discussion? When affordable housing comes up I think of new junk homes which families searching for affordable housing cannot afford no matter what the price. For they will be lacking in energy efficiency not something lower income families can truly afford.

We all hear horror stories about new housing in Lawrence especially those being built with unskilled labor. Concrete work suffers as well.

Richard Heckler 12 years, 2 months ago

People might be better off buying a home East of Mass. Rehab the place to before moving in and it comes with trees.

May not save money in the end but the quality of initial construction likely would be a better investment. In the end you know what is in the house.

dviper 12 years, 2 months ago

Agree with formerlyKS about the comparison of house prices.

One of my first homes in San Diego was $320,000 in 1984. It was a very small slab ranch home with 2 bedrooms, 1 bath, and no garage. It was about a mile from the beach, and it wasn't in great condition. I searched the San Diego county web site this morning for the county appraised value and it is now valued at $657,000.

I've lived in many cities all over the U.S. from east coast to west coast and from Northern to Southern, and Lawrence has been by far the most affordable place to live. When my family moved to Lawrence back in the 1990's, we bought a home double the size of our previous home for half the price, and much better quality, and in a really nice neighborhood. And, as poster 'formerlyKS' said, we don't have to worry about high crime, tons of illegal aliens, smog, insane traffic, and high taxes just to name a few.

My sister recently sold her house in California. It was a small slab ranch style home approximately 1300 square feet, with 3 bedrooms, 2 baths and a 1 car garage. She sold it for $586,000 in 3 days. She actually had people bidding up the price, because homes in the surrounding area were going for much more. She moved to KC with her job transfer and bought a brand new home in Olathe that is 2,975 square feet, with 4 bedrooms, 4 baths, and a 3 car garage for $329,000. She and her family love it.

Sometimes, I feel like the people who are constantly complaining about growth in Lawrence have never lived anywhere but Lawrence, and just don't know how good they have really got it. Try living on the east or west coast and then compare your total quality of life, especially your children's. It's a no brainer:.. Lawrence wins hands down every time.

Jamesaust 12 years, 2 months ago

"the market corrects itself"

It is important to realize that while real estate is subject to market forces, it (particularly residential r/e) is a heavily distorted market and therefore operates quite inefficiently.

Two factors that currently distort the market most: 1. negative interest rates - despite now several years of interest rate increases, the "real" rate of interest remains below inflation. This is an expansive monetary phenomenon that has several consequences, one of which is over-investment in fixed assets, including real estate. When interest rates rise to above the rate of inflation (as it will as sure as the sun will rise), the pain should be quite severe. [note: the has been a global phenomenon] 2. massive tax subsidies - subsidies on mortgage interest, tax free capital gains (on not one but TWO houses). All this is fine except: (a) this means that those who do not own real estate - primarily the young, the poor, many minorites - subsidize those who do, and (b) an over-investment in a non-productive asset, as houses do not create economic value. Frankly, the market cares not whether the roof over your head is a mansion or a shack, but the investment to clad your kitchens in marble and add another thousand s.f. of space is money that could have been invested in productive assets that create wealth over the longrun (wealth, for example, to pay for the baby boomers' retirement).

Godot 12 years, 2 months ago

I have, in the past, worked with some of the nation's wealthiest people, those who were on the boards of the giant corporations, who were embassadors and political appointees. Many of them rented their residences for the reason that Jamesaust says: the residence you live in does not create income. Those movers and shakers owned millionw in real estate, but every bit of it brought in income. They leveraged their money to bring in cash; they did not tie up their cash to provide themselves a place to crash.

Godot 12 years, 2 months ago

The tax breaks for home ownership are insignificant to truly wealthy people. Do you think they make investment decisions based on being able to deduct the interest on a mortgage? Are they grateful to be able to take $250,000 in tax free profit on their home? hardly. That is, at most, one years' gain on the home of a truly wealthy person.

These supposed tax breaks, in the form of mortgage interest deduction and tax free gain on sales, are just another way to make sure we ordinary Americans continue to invest in America. The truly wealthy just laugh at us, as they invest, through their off-shore accounts, all over the world.

just_another_bozo_on_this_bus 12 years, 2 months ago

"The truly wealthy just laugh at us, as they invest, through their off-shore accounts, all over the world."

They do the same when they buy the Congress and the President to do their bidding (and all their "political" donations are tax-deductible-- a double joke on the rest of us.)

Commenting has been disabled for this item.