Thursday, April 21, 2011
Why Isn't That House Selling?
We hear this remakr all the time. "Something must be wrong with that house. It's been on the market for months."
In some cases, there are obvious reasons why a property has not sold- the list price started out too high, it needs things like a roof or is dated, or it is a unique property in need of a particular buyer like a home with an in-law set-up.
However, in the majority of cases at this time, houses are sitting on the market because there are fewer buyers looking to purchase a home. When the credit crisis hit and the nation saw banks and lending institutions closing left and right, the requirements for buying a house ie: good credit scores weeded out a vast majority of prospective buyers.
People with credit problems and insufficient cash to close found themselves locked out of the opportunity to get a mortgage. With banks having stricter policies to be approved for a mortgage the buyers that are able to get financing tend to be serious buyers. They are out looking at properties and they want to buy, especially to take advantage of the record low interest rates.
We have rebounded somewhat from the credit crisis. Prospective buyers from 2010 have been working on their credit and depending on how in depth their problems were, they may see resolve soon and will now be able to get financing.
But the lack of buyers is also due to the fact that people are nervous. They are anxious to make big purchases, upgrade for fear of job loss, the stock market, and other variables. We have seen an increase in activity in the Rochester market. This is a great sign not only for real estate but for the national economy. The status of the real estate market is a key indicator to our economy as a whole. If people are not purchasing properties (a very large investment) then they are probably not spending money on other things such as vacations, cars, home improvements.
There are many houses on the market right now. Buyers and sellers tend to get nervous about this. "Why are so many houses for sale?"
The answer is simple- despite a tough economy life goes on. People are downsizing due to age or personal finances, death, relocating, upgrading due to increase in family size. We are also in the "spring" market which tends to be busier because leases for apartments come up in late spring, people want to be settled in their new home for the upcoming school year, and in this part of the country we are unburied from our difficult winters.
Bottom line is that if you are looking to purchase, don't discredit a property simply because it has been for sale for what you deem a long time. Most often there is not a cut and dry explanation as to why a property has not sold. There is a buyer for every house. Maybe that cape-cod you've had your eye on for a few weeks is the one for you!
*image provided by Google images