Overheard on a Plane

RottedOak

On a flight this evening, I got to overhear a local seller's attitude towards the market. He was telling the person next to him about trying to sell his home in Snohomish. When we landed, he had a message from his agent about an offer. The offer was less than his asking price (about 3.5% less, based on the amounts he mentioned), and the prospective buyer had the temerity to ask for closing costs as well. He called his agent to say that the buyer was "crazy" and he wanted full price with no closing cost concessions. After he finished with the agent, he called someone else to inform them about the "super-lowball offer" he had gotten.

So there you have it: a seller in a distant suburb (usually among the first casualties as prices start to fall) thinks that 3.5% below asking is "super-lowball". Not just lowball, but super lowball! Apparently when he reset his watch for the time zone change, he put it back to 2006. Is anyone still surprised that sales volumes continue to drop?

- RO

unearthly

RottedOak wrote:

So there you have it: a seller in a distant suburb (usually among the first casualties as prices start to fall) thinks that 3.5% below asking is "super-lowball". Not just lowball, but super lowball! Apparently when he reset his watch for the time zone change, he put it back to 2006. Is anyone still surprised that sales volumes continue to drop?

- RO

From my experience as a seller in this brutal market 3.5% less is an excellent offer, one I would have jumped all over. In my case I got an offer that was 10% below asking and was ready to negotiate to get the deal done but the buyer didn't budge off the bid price. Of course my house is in the distant neighborhood of Capitol Hill (15th Ave area).

I am currently pending after ~35 days on the market and ended up selling to the original bidder at the price I offered two weeks earlier. There was another offer that I was about to close on when the original bidder came back with a better offer. I was somewhat aggressive, slashing my asking $25k after 2.5 weeks and selling for 5% less than my original asking price.

The fellow in Snohomish is in for a world of hurt when fall inventory and rates skyrocket. It's going to be incredibly difficult to get a loan later this year and into 2009.

Robroy

Although I concur that this sounds downright silly, it is possible that a mitigating factor may be that the guy has already dropped his asking price by a huge amount. But people say all sorts of things "purposefully too loud" on airplanes and in theater lines.

I do think there are fewer and fewer sellers that are "holding out" though. I've seen two houses within a few blocks of me go on the market, off, and back on again. One, in this second go-round, has had the sign up for four months now. It's a very well maintained place but the market seems to be dropping out from under him slightly faster than he is willing to drop his price.

Lake Hills Renter

I'm seeing many houses in my neighborhood that are not dropping their prices at all, and staying on the market for months. My favorite is the house that was on the market off and on for 2 years, then dropped off for the winter. When it came back on the market this spring (with a new DOM), it was listed for the same outrageous price it had sported for the 2 years it didn't sell. I haven't checked it lately, but to my knowledge it still hasn't dropped its price...and is still for sale. The agent apparently got tired of doing open houses, because they dried up this summer.

Update: I checked redfin and it looks like they dropped the price $10k finally, after 2.5 years (don't let the 90 DOM fool you)!

20 164th Ave NE

Robroy

Lake Hills Renter wrote:

I'm seeing many houses in my neighborhood that are not dropping their prices at all, and staying on the market for months. My favorite is the house that was on the market off and on for 2 years, then dropped off for the winter. When it came back on the market this spring (with a new DOM), it was listed for the same outrageous price it had sported for the 2 years it didn't sell. I haven't checked it lately, but to my knowledge it still hasn't dropped its price...and is still for sale. The agent apparently got tired of doing open houses, because they dried up this summer.

Update: I checked redfin and it looks like they dropped the price $10k finally, after 2.5 years (don't let the 90 DOM fool you)!

20 164th Ave NE

Interesting. When it drops below $320k I may be interested. No, I am not kidding.

perfectfire

Lake Hills Renter wrote:

20 164th Ave NE

That picture of the original flyer/ad for the house is pretty awesome.

Listing Agent wrote:

Looking for something that's Retro and really cool?

Uh, I don't think anybody is going to be fooled by calling a home that hasn't been rennovated since it was built "retro".

Listing Agent wrote:

2-car attached garage, big enough for a Hummer H1.

Okay, I guess since every other agent and developer is trying to market to the eco-concious this realtor figured that there was a huge untapped market of people that don't care about being "green".

unearthly

Robroy wrote:

Although I concur that this sounds downright silly, it is possible that a mitigating factor may be that the guy has already dropped his asking price by a huge amount.

In a market where waiting three months for the right offer might cost you 5-10%, you take the 3.5% and run; short-sales excluded.

Robroy wrote:

I do think there are fewer and fewer sellers that are "holding out" though. I've seen two houses within a few blocks of me go on the market, off, and back on again. One, in this second go-round, has had the sign up for four months now. It's a very well maintained place but the market seems to be dropping out from under him slightly faster than he is willing to drop his price.

People need to start dropping in 3-5% increments every 3-5 weeks or they will be chasing the market to the bottom. I'm seeing houses on Capitol Hill and Queen Anne languish due to insignificant price cuts. Cutting $10-15k on a million dollar house is not going to attract buyers.

Alan

Interesting. When it drops below $320k I may be interested. No, I am not kidding.

I'll buy it first for $325k.

So there.

Robroy

Alan wrote:

Interesting. When it drops below $320k I may be interested. No, I am not kidding.

I'll buy it first for $325k.

So there.

SOLD!

EconE

I remember that house. It's been discussed here on the bubble before. Well...I remember that idiotic shuffleboard picture that the owner actually thinks is a selling point.

Robroy

EconE wrote:

I remember that house. It's been discussed here on the bubble before. Well...I remember that idiotic shuffleboard picture that the owner actually thinks is a selling point.

Hey, why do you think i was offering 320?

Lake Hills Renter

Yea, I think I posted it one of the other threads. It's the prime candidate in my mind for seller stubbornness. No one has lived there in years, so someone either owns it outright, can afford 2-3 years of PITI, or is taking a serious bath.

lamont

perfectfire wrote:

Listing Agent wrote:

2-car attached garage, big enough for a Hummer H1.

Okay, I guess since every other agent and developer is trying to market to the eco-concious this realtor figured that there was a huge untapped market of people that don't care about being "green".

I'd guess its not really about environmentalism or not, but that the agent is shooting for "more money than sense".

RottedOak

Robroy wrote:

Although I concur that this sounds downright silly, it is possible that a mitigating factor may be that the guy has already dropped his asking price by a huge amount.

From the information he gave to his seatmate and on the phone, I'm pretty sure I know what property it is, and there haven't been any price drops. I believe it has more to do with the house being only recently placed on the market -- he's still optimistic about getting full price. A few months of waiting may change his thinking.

But people say all sorts of things "purposefully too loud" on airplanes and in theater lines.

He wasn't talking overly loud. It's just that I was sitting close by and he wasn't whispering. Of course he might have slept on it by now and have an entirely different perspective. But that initial reaction that the offer was "super lowball" was just so typical of the attitudes that will drag out the bust over the next few years.

- RO

RottedOak

Update on this situation: A few days ago, the seller dropped the price. It's now listed for the same amount that the seller originally derided as "super-lowball."

Sometimes irony is the most delicious form of comedy. Or was that tragedy?