Statistics and I are NOT friends. While I do have the innate, super-geeky, left-brain need to explore and appreciate the minutia that is statistics, I despise its chameleon like qualities. Politics, for instance, clearly shows that the SAME set of facts, put through the filter of any specific agenda, can skew the data to anyone’s favor. So therein lies the rub…who is most objective?
Well, as it turns out, I TRY my best to be as objective as possible, so there are some sobering statistics I have heard that would like to share with you. The following are some information distributed by the Otteau Valuation Group, Inc – a real estate valuation and consulting firm with a focus on accurate market analysis. The can be found at www.otteau.com. In the meantime, here are some recent snippets they have released:
- For every $10,000 over accurate market value a sellers lists their home, they are likely to eventually sell fro $4000 less than said market value.
- The rate of decline on home prices sits around ½% to 1% per month.
- It is likely that home prices, while they will start their recovery sooner, peak prices are likely to return around 2020.
- For every 1% rise in the mortgage interest rates, it translates to roughly a 9% rise in home price over the life of the loan.
Okay, so what does this tell sellers? First, if you must sell your home, then do NOT overprice it – you will eventually get less in the long run if you do. Today’s buyers are savvy enough to be able to tell when a home is overpriced, and stay far, far away from it. Eventually, you might get low-balled by a bargain hunter, who will simply move on to the next house if you “hold out for more.” For anyone who is looking to hold out on selling their home until the “market recovers,” you will be waiting a LONG time. This is a long, slow recovery folks – waiting 18 months isn’t going to bring back the numbers to 2006 levels. All it does it hold up your life and the choices you want to make to be happy. If you aren’t underwater, and you decide that moving to Maine
Now, what about you, buyers? WHAT THE HECK ARE YOU WAITING FOR? Prices and interest rates are both low right now – this is a historic time! Don’t you watch CNBC or listen to NPR or read the WSJ? In January, existing home sales went up again by 2.5% or so…January, which is usually NOT a huge month for sales. If home sales do increase, the interest rates will rise, so do NOT lose out the ability to get more house for your money at this time. Interest rates have already moved from 6 months ago…don’t miss out in the great deals…
Over the next few weeks, I will spend a little more time hammering out some of the statistics that we use to evaluate home prices in this area – hopefully, it will be information that helps potential buyers and sellers make the best choices with their homes.
