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September 15, 2010

Price cuts on Baltimore homes for sale: $44 million

Here's a just-reduced sign for Baltimore's housing market: "$44 million off!"

That the collective cut real estate site Trulia calculated on city homes for sale as of Sept. 1. Any home with an asking-price reduction over the past year -- except foreclosures -- added to the grand total.

Baltimore was ninth among large cities for its share of homes with asking-price cuts, at 34 percent. That's par for the course for the city, which has been in the top 10 for a while now.

The average asking-price reduction among Baltimore would-be sellers was 12 percent. Market statistics show that the average homeowner who sells is getting less than he or she was asking for, too. So there are a lot of people out there settling for a significantly lower price than they originally thought they could get.

Some buyers say they will always offer less than sellers are asking. (Wonk reader elweedz, for instance, commented yesterday: "I think 80% of asking would be the MOST I would pay.") I wonder how many homeowners put their properties on the market with this sort of buyer philosophy in mind, thinking, "Well, I'll have to take a cut regardless, so I'll start at 110 percent."

It's a game of chicken that can leave a lot of sellers frustrated ("why isn't anyone looking at my home?") and a lot of buyers annoyed ("why are all the homes so darn overpriced?").

Unless you're the sort of buyer who gets a kick out of negotiating, of course.

Buyers, what should sellers do to make the experience better?

And sellers, what should buyers do?
Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (8)
Categories: For sale, Housing stats
        

Comments

On SEPTEMBER 15, 2010, Jamie wrote:

Price cuts on Baltimore homes for sale: $44 million

On SEPTEMBER 15, 2016 Jamie will write:

Price cuts on Baltimore homes for sale: $440 million


sellers remember.....sell now, or be priced IN forever!!!

That $44 million could be a little misleading #. I actually listed my townhome I bought for $175,000 in 2005 for $43 million earlier this year. I have been cutting the price every month hoping that these darn "buyers" would see the "deal" they are getting..the price is down to $300,000 and still no bites. I even changed the carpet, painted and put in granite counter tops. That all cost me a couple grand granted but I thought for sure people would be willing to pay me (especially if the bank gave them a big loan). What is the deal? Can any buyers out there tell me what I need to do to make a big profit off my townhome? I need to trade up and possibly get a nice place on the water. My salary won't support this move - I need a buyer to give me the $$$.COME ON!!

"Bernie," it's a good thing I didn't have a mouthful of water when I read your comment.

@Bernie

What else would I get for $43 million?

I worked in mortgage biz for 12 years and am so glad that i dont have to listen to people tell me how smart they are...

"I just closed 45 minutes ago and already I have 50k in equity".

Right- cause the house is worth so much more with your name on title vs the last owner.

I am a buyer myself and having a big problem finding the same deal that was could be had exactly a year ago in 2009. Bluntly applying a rule of offering 80% may not work for all areas of Baltimore, and for SFH vs Townhouse vs Condo.
For example, it is more likely to snatch a good deal on an older ranch-type home than a newer 4-bedroom colonial.

Advice to sellers: if you really want to sell than price your property to 2003-level. Selling now allows tom minimize losses as real estate prices do seem to head down.

To fellow buyers I'd suggest holding out at least a year out unless they find a deal marked as "below market value"

Ken -

It is tough because right now there really is not a "market" for houses. There is almost zero demand (unless you are economically/financially illiterate) The perceived values of homes are way artificially high. With interest rates this low- the principal write downs, stimulus money, blah, blah. Prices will fall - it is just a matter of when the powers that be let them.

Some amount of parity is always going to exist. A buyer will, of course quote lower than market price and exactly opposite is the case of a seller.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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