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Anatomy of a real estate recovery

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As I first mentioned in my column last month, it would appear, at least in our local market, that the real estate recovery is upon us at last. While gloom persists in many areas of the nation, and we have a long way to go before our entire nation is back on track, we have most definitely turned a corner here in Central Mass.

In the last few days, for example, I have had six of my listings sell, which is more than in the previous three months combined. If that's not a sign of a recovery, then I don't know what is. Drilling down a bit deeper into some of the sales reveals a particular pattern that further points to the inevitable recovery around us. For one thing, all six of the properties sold for nearly full price, and half of them had multiple off ers. Granted, those prices were less than they would have been at the peak of the market in 2006, but after properly analyzing the recent sales and inventory, and coming up with an attractive off ering price, all six sold at what I feel was a great value, given the current marketplace. Buyers who had cash in hand, a mortgage pre-approval ready, and the courage to move forward did really well for themselves. Down the road, they will undoubtedly be talked about, as the folks who got a great deal way back in 2009 when prices were great.

Much credit goes to the Sellers as well, who really have been great to work with, under obviously stressful circumstances. My hat goes off to one in particular, an individual who really understood the market as well as any Seller I've worked with in a long time. Looking at a pending move out of our area, he lived in a gorgeous young home that was meticulously decorated, amazingly appointed. Together, we had a choice to make. List the home over 700K, into a market filled with 41 competing listings, in which not one home had gone on deposit in town in the last four months, or price it aggressively in the mid 600s, knowing it was "below market," and allow the market forces to dictate on their own where the

true value" lies. As a result of that strategy, the open house generated over 70 buyers, and at least seven offers, with many of them well over the asking price. This meant that not only did the Seller get close to 700K anyway, but he had the ability to pick and choose which Buyer had the best possible qualification to move forward.

I'm sure that people, looking at the situation from the outside, were shaking their heads a bit at the implementation of such a plan, but it worked better than anyone could have ever anticipated. I've already heard from at least one party who said that we "gave the house away," yet I'm not sure how that could be possible. If 70 people, over the course of a week, had the ability to competitively bid, and make the absolutely highest and best off er, then doesn't that off er, by definition, represent the highest price obtainable in the current marketplace? Seems like a simple economics experiment to me. In a neighborhood with an average "days on market" over the last 18 months of 130+ days, and an average sales price in the 620s, this Seller achieved nearly 700K in a week. To anyone who thinks we could have gotten more … I ask them, from whom? Where were those bidders? I've seen the opposite result far too often. List at 750K, then a month later, drop it to 725K. Then 709,900, then 699,900, and about then after four or five months the Buyers start asking, "What's wrong with this one? It's been on the market for a long time." In the meantime, the mortgage payments add up, the competition starts to increase, and you're right back at square one.

Of course, each home and each situation is, by their very definition, completely unique. The strategy that succeeded with one property may be wrong for another, and that's precisely where we come in. This is the third one of these recessions I've been through, and it's great to be able to tap into that knowledge base of over 2,000 transactions, and 20+ years of experience, to custom design the best possible approach for each individual seller.

A few things I've noted this week that bear discussion. For one, inventory is critically low in many sectors. Despite the national media, it's important that we all recognize that real estate is local, and here in Central Mass., the number of "cream puff " homes out there that are priced right, and ready to go, is very small. I can tell you personally that my listing inventory is about as low as I've ever seen it, so if you're thinking of making a move, we really need to talk. Call me at 508 735-4663, and let me know your thoughts and plans.

Another interesting thing we have seen in a year or so, are Buyers contacting me not because of a particular home they want to view, but because they realize I often know in advance which ones are coming on the market, long before they do … and they want to try and grab something before it hits the market itself. That's yet another great sign that we've turned the corner at last.

Some final things, since I'm running out of room. Home Sellers, I still have room for a few more listings under my annual Homeowners Blend Program, with real estate fees as low as 2.5 percent. To the many Buyers out there, the time is now. Get in touch and let me know what you're looking for. The property of your dreams may be closer than you think. Check out the online videos for Buyers and Sellers alike at www. stevelevine.com.

Steve Levine is President of Steve Levine Inc. and an agent at REMAX First Choice. He's been ranked as the top REMAX Agent in New England for over a decade, and can be reached at 508 735-4663, or by e-mail at steve@stevelevine.com.

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Posted by on Feb 27 2009. Filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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