There are two types of homes selling in today's buyer's market. Let's call them:
The "Opportunity House", and
The "Deal House"
Before we get into 1. and 2. above, we first need to agree that today's real estate market is a buyer's market. We have all heard that over and over and we are in agreement on that point, correct? Secondly, let's examine the defining characteristic of a buyer's market.
The defining characteristic of a buyer's market is the continuous downward pressure on prices that ensures that the market value of a property does not remain static. A seller's market is characterized by price appreciation; conversely, a buyer's market is characertized by falling prices. This may be a bit tough for sellers to come to grips with, but neither a seller nor their agent will be able to develop an action plan to deal with the market if either is unwilling to accept the truth of the underlying principles.
Back to the two types of houses:
Characteristics of the Opportunity House
Priced to sell, which means priced just below the so-called "market value." Why is this necessary? Because the amount that is "market value" today is not market value tomorrow in a buyer's market. My advice to a seller? Price it right and obtain an offer before the market adds even more downward pressure. My advice to a buyer? Make an offer today -- this property is priced to sell and if you wait until you think that we are at the bottom of the market, you will wait too long and are guaranteed to miss it, anyway.
House is in excellent condition
New to market. Homes that have been on the market for a while with no price adjustments are likely overpriced and have already been passed over by buyers.
Characteristics of the Deal House:
It is the price that makes it a deal.
Condition can be quite variable, but pricing accurately reflects condition.
One big component of this type of house in many markets (not so much the Northwoods) are REO properties (Real Estate Owned by financial institutions, i.e., foreclosed properties.)
So now you know how I see things. Looking at the topic from a more local perspective, you will not find many "Deal Houses" in Manitowish Waters or surounding communties. Several reasons for that: 1. Not too many foreclosed properties -- just a few here and there, and they are most likely to be new construction or flip homes in which the owners got into trouble, financially speaking; and 2. A large proportion of the homes for sale are not primary residences and many sellers are still willing to wait out the market.
Regarding "Opportunity Houses", we do have a number of them locally and I predict that the number will increase as we go forward. Turning their property into an Opportunity House will be the best strategy for sellers in 2009 if they truly do desire to sell their property.
I just wanted to add this photo -- I received it in an email; I'm not sure what it is a photo of, but it is quite beautiful.
