We have seen a lot of properties come on the market lately, at tremendously high price levels. Over the past several months we have begun to see these listing prices fall. A lot of people are asking me what’s going on with the market. I usually mention to them that if you are serious about selling, then check the facts your agent presents to you, ask a lot of questions, and it is always a good idea to interview more than one. But if sellers are expecting to throw out a high number just “to see what happens” in this market, I believe you are wasting your time.
People buy and sell in all markets; high times and low times respectively. Their rationale is not for me to question; my job is to determine a strategy to maximize their returns, and provide the best representation I can give. But, the market is correcting; we in the Flathead Valley lag behind national trends, and the national trend has been slowing for a while now.
When you see the large number of price reduced signs out there, and keep hearing about the bad real estate market, one must keep a few things in mind and under consideration. Prices and expectations have been inflated for a while, so when we see these price reductions on a massive scale, it’s because the values weren’t real in the first place. Sellers are selling property, but the expectations are a lot different in this market than previous ones. Many sellers are still making good gains compared to other markets and investment vehicles. Remember, we make money on investments, a little bit year after year over time. If you bought your house last year, made some improvements and are trying to sell for a big gain this year, well, I’m not sure what to tell you.
This concept of making money on our investments over time also applies to other investment vehicles, such as the stock market. Has anyone seen the numbers on the Dow lately? I know some stock analysts who predicted the Dow to be at 14,500 at year end, 2007! If you put your money in the stock market a year ago and sold yesterday, I’m not sure how much gain you would have had. But, if you put your money in the stock market 10 years ago or 5 years ago, chances are if you sold yesterday, you would have had some gains. The same is true with real estate investing.
However, when you interview your agent and they tell you that based on recent, sold, good comparable data, your property is worth $200,000; it is probably close to value. If you want to sell your $200,000 property for $350,000 right now, then keep in mind the challenge you have in front of you, in any market.
We have had a few great years as the economy expanded, and as with many things, the economy runs in cycles. Also, to complicate matters we have a major presidential election this year, and as you know there are a lot of pressures out there concerning our day to day stuff. Expectations and good information are the key, this is a great market to buy, and for some sellers to sell. It’s all about your perspective, your expectations and what’s important to you.
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