Wednesday, November 21, 2012

Cleveland, Northeast OH Area Real Estate Market October 2012

According to the Northeast Ohio Regional Multiple Listing Service and an article from the Cleveland Plain Dealer, homes sales in the region continue to surpass last year's sales figures. Lower home inventory, along with higher buyer demand due to low interest rates, is driving this increase in activity and increase in sales prices.

Usually the market slows in the fourth quarter, but that was not the case this year with a rise in sales during that time-frame. Sales comparing October 2011 to October 2012 show considerable improvement.  Among the 15 counties in Northeast Ohio, single family home sales are up 24.4% and condo sales are up 43.8%.  In addition to the increase in sales activity, Northeast Ohio is showing a 13.2% increase in single family home prices and 0.5% decrease for condos, compared to last October. 

The key point here is that the market is starting to stabilize.  Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates.  Buyers should note that interest rates have reached nearly as low as they can go, when deciding the best time to make a purchase.  The data over the past several months indicates we have seen the bottom of the local real estate market.

By comparison, Northeast Ohio continues to outpace the national sales increase of 2.1%.  Nationally, 4.79 million homes have sold, which is behind the 5-6 million home sales, considered to be a normal or healthy range. 



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Monday, November 12, 2012

Pricing Your Home To Sell

Home pricing is the most important aspect of home sales, in any real estate market.  Any property will sell, regardless of the market, if it's priced with that surrounding market. 

A common misconception is to price a home high when first listed and then reduce later.  If a home is priced right, a home will get more showings, as you can see in the graphic below.  More showings indicate the market feels the home is listed properly, and there's a feeling that a deal can be put together. In fact, if a home is priced right where it should be, the offer could come fast and even produce multiple offers, driving the price up!
   


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As you may be aware, we are currently experiencing a buyer's market, although it is not quite the buyer's market it was over the past several years.  Low interest rates are creating higher buyer demand, and we are also seeing fewer homes for sale.  Depending on the location, that mix of higher demand and shorter supply is showing an improvement in sales prices.

Still, we are in a buyer's market, and in a buyer's market a home needs to be priced better than the competition and in equal or better condition.  As you can see from the graphic below, the homes that are not well priced or not in the best condition aren't selling.



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Recent sales data in Northeast Ohio shows that out of every 100 homes listed for sale, 46 fail to sell.  This is actually an improvement over the fourth quarter last year. 

Even with this improvement, of the 54 that did sell in the fourth quarter, 33 of the homes (60% of the homes that sold) required at least one price reduction.  That tells us that 79 out of every 100 homes are priced incorrectly at the time it is listed.

To further dispel the the notion that pricing high at the beginning of the listing won't effect the sale or the price of the home, the graphic below shows the difference in homes that didn't require reductions versus homes that did.  Homes priced correctly sold in 34 days for 96% of asking price, while the homes that required reductions sold in 191 days for 80% of asking price.


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Again, the key to selling real estate is proper pricing.  Related to that, is hiring an agent that has a solid marketing plan and can provide you with the proper research you need to make an informed decision on pricing.  That way, you're not wasting valuable time and money and wondering why your home is still on the market.

I invite you to contact me anytime to discuss further.


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