Cool housing market offers buyers opportunity

Herb Weisbaum • Profile • E-mail

There’s no denying it any longer. In most parts of the country, the sizzling house market has cooled.

The latest numbers tell the story: Sales of existing homes are expected to drop 6.8 percent  this year. The people who make their living selling homes prefer to put a more positive spin on these numbers. They say the marketplace is just going back to normal.

“It’s not normal to have 15 offers on a property,” says Jim Warkentin, a Realtor in McLean, Va.  “That’s just crazy.” For the most part, those crazy days are gone.

“It’s a tougher marketplace now,” says Joe Woodbury, a RE/MAX agent in Barrington, Ill. “The homes are really taking longer to sell."

That may be bad news for sellers, but it's good news for buyers. In many markets, buyers have the luxury of being able to take their time and negotiate a deal for the first time in recent memory.

In Richmond, Va., Realtor Emmett Smith says houses are still selling, but it’s taking a lot longer. Six months ago houses there sold in three to 10 days. Now it takes 20 to 30 days.

In Grass Valley, Calif., broker Laura Berman of United Country Town and Country Realty, says sales in her Northern California region are down 30 percent from a year ago. The “inventory is huge,” she says, and price reductions are common.

Buyer's market
“The buyer is clearly in the driver’s seat,” says Bob Callahan, who is about to close on a house in McLean. “Houses are still expensive,” he says, “but you can find deals now.”

The house Callahan wanted was originally listed at $629,000. After two weeks without an offer, the owners dropped the price to $599,000. Callahan got the house for $592,000. He says he could sense the sellers' “willingness to negotiate about the price very early on.”

Callahan’s agent, Kate Ryan of Long and Foster Realtors, says sellers need to understand that the price of a house is set by the market, which is now flat or dropping. “That’s hard for a lot of people to deal with,” she says. Smart sellers need to realize that buyers can now take “the pick of the litter,” and they need to set their asking price accordingly.

Laura Berman says the sellers she deals with in the Grass Valley region "are mostly in denial.”

“Location is important,” Berman says, “but if you have comparable houses, it always comes down to price.” And now that buyers may have dozens of houses to look at in their price range, they can determine the true value.

“The homes that have the best value are the ones that are going to get shown the most,” Berman says. “And that’s where you want to be. You always try to be in the top five, hopefully within the top 10 of the competitive houses."

For sellers, it is too soon to panic. Even though the market has cooled, the National Association of Realtors expects 2006 to be the third-best year for home sales ever.

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