Hello there, it’s me, Steven Thomas, with ReportsOnHousing.com.
Fun fact: 43% of all homes on the market today have been FOR SALE for over two months.
I know. I know. Homes are supposed to fly off the market in a matter of days with multiple offers. But, that just is not the story for every home that comes on the market.
For many sellers, they have been disappointed by the housing market and are second-guessing themselves.
I get it. The following has been playing out right here in Orange County…
The excitement is in the air. A homeowner sits across from a REALTOR® and signs all of the contracts. Their home is officially on the market. With eager anticipation, they clean their home from top to bottom and turn on all of the lights; the first potential buyer is coming to look. After the buyer tours the home, the seller returns and wonders whether the buyers liked it enough to write an offer. After all, the market is incredibly hot, right? Yet, there is no offer. Showing after showing, day after day, week after week, there are no offers. Moreover, the number of showings has trickled down to only a couple per week after three months of market exposure. What is going on?
The waiting game is standard for luxury real estate, but there are plenty of homes in the lower ranges having trouble as well. Nearly a third of all homes priced below $750,000 have been FOR SALE for more than two months and are still waiting for the right buyer to bring a mutually acceptable offer to purchase. For homes priced between $750,000 and $1 million, it grows to 36%; the higher the price, the harder it is to sell.
If housing is so unbelievably hot, why are many sellers struggling to hit pay dirt? Of course, most everybody immediately thinks it is the price. In most cases, that is only part of the issue.
Most every person that walks this planet earth prefers things to be brand new. Buyers of homes are no different. Purchasing a brand new home in Orange County requires a lot of money. After close a buyer still needs to put in window coverings and landscaping at a major cost and a lot of inconvenience.
Instead, buyers prefer to purchase a residential resale home with all of the bells and whistles in excellent condition. The more a home has the look and feel of a model home, the faster it sells. Price is very important, don’t get me wrong. However, it’s not just the price. Location is important and so is the condition.
When a home has vinyl flooring, popcorn ceilings, stained carpet, single paned windows, scuffed walls, aluminum blinds, ceramic tile in the kitchen, original bathroom hardware, water stained cabinets, etcetera, this is seen as deferred maintenance and a major project for the buyer after the close of escrow. Throw in a pet with all of the odors, hair, and damage, and it is no wonder that many sellers are having a hard time selling.
Many investors have flipped homes that originally had a ton of deferred maintenance, fixed them up, and then sold them for a handsome profit. They install granite counters, flooring, new paint, light fixtures, cabinets, scrape the popcorn ceilings, and install new sod, plants, flowers, and mulch. Basically, they make a residential resale look and feel like a model. Boom! They sell it quickly and make a nice profit.
In order to compete and fetch top dollar, a good ol’ fashioned homeowner who has lived in their home for years must invest in their home by approaching selling like a flipper. Invest in their home and they will get a nice return on that investment.
The alternative is simple, lower the price and you too will find success.
For the latest Orange County housing pulse, subscribe to my report. I am Steven Thomas with ReportsOnHousing.com.