Speaker: Buyers uninterested in low-balling
Lori Thompson says properties not selling unless priced close to target
November 8, 2009
Steamboat Springs — The key to selling residential properties in Steamboat Springs through the first three quarters of 2009 has been an ability to come within 10 percent of hitting the bull's-eye.
Broker/owner Lori Thompson told a gathering of nearly 200 people at the Colorado Group Realty Real Estate Roundup and Expo on Thursday night that sales of single-family homes, condominiums and townhomes closed through the Multiple Listing Service this year have been for an amount within 10 percent of list price.
"Homes need to be properly priced to sell in this market," Thompson said.
She is the outgoing president of the Steamboat Springs Board of Realtors and the 2009 Realtor of the year.
In the case of single-family homes, Thompson said, sales prices have on average been 92 percent of list price. And sellers have been loath to accept low offers — the lowest offer accepted was 80 percent of list price.
A similar trend can be observed among the 88 sales (when sales of new projects are excluded) of townhomes and condominiums, Thompson told her audience. Those sales averaged 90 percent of list price. Four offers were accepted in the range of 70 percent of asking price.
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Those numbers should be a signal to sellers whose property has languished on the market for a lengthy period, Thompson said.
"In that case, in order to get buyers' attention, price reductions are required," she said. "Buyers are not spending time low-balling properties that are not accurately priced. If that were the case, the sell-to-list price (ratio) would be in the 60 to 70 percent range, not in the 90 percent range."
Although 2009 dollar volume is 79 percent of the peak in 2007 and transaction volume is about the same at 81 percent, Thompson said average sales prices through the third quarter are holding strong for condos and townhomes, and single-family homes have taken the biggest hit.
The average price of condos and townhomes actually has grown slightly in 2009 to nearly $700,000. However, the average sales price of single-family homes has dropped from more than $1.2 million in 2008 to about $700,000 this year.
Thompson predicted that financing would continue to be a challenge for most buyers in 2010, especially in the condo market, because lending rules are in flux. Bank-owned properties and short sales will continue to be a part of the market, Thompson said, but not the driving force in Steamboat.
Sales at One Steamboat Place and Edgemont will lead the way in 2010, Thompson said, but she predicted that the real estate market would follow a resurgent winter tourism season with the ski industry improving on 2008/2009 lift ticket sales and lodging numbers also improving.
The key to reaping rewards, Thompson said, will be understanding market cycles, which typically come full circle within six to nine years.
When the economy is in recovery from a recession, Thompson said, excesses have been wrung out of the market and prices have begun to recover. Most investors still remain on the sidelines, she said. And that is the time for owners to improve their properties and wait for the expansion phase to return.