Looking to sell a home in a slow market? The key is pricing your house according to your need to sell, says Lew Sichelman in the Los Angeles Times. Known as "absorption-rate pricing," the tactic involves calculating how long it takes a home to sell in your market, comparing it to your own preferred selling timeline and setting your price accordingly, Mr. Sichelman says. Sellers who aren't in a hurry have more leeway with price, and those with a shorter timeline must set their asking price lower, he says. The key to determining your price involves calculating how many similar properties are on the market in your area, how many months of inventory your market has and the rate at which homes have been selling locally.
Consumers drain equity from homes
Long before the housing downturn and today's foreclosure troubles, homeowners were losing equity in their homes, says an Associated Press article published by
Sun-Sentinel.com. Consumers have been using their homes as piggy-banks, borrowing against them to pay for things like home improvements, personal spending and credit-card debt, the article says. Falling housing prices only worsen the situation and some economists forecast that by the end of 2008, the amount of equity U.S. homeowners will have in their homes on average will fall below 50%, making it the first time since the government began collecting such data (in 1945) that Americans will owe more on their homes than they own, the AP says. "To deal with your single biggest asset like that is risky," the article quotes Jim Gaines, research economist at the Real Estate Center at Texas A&M University as saying.
New suburbs in decline
In Charlotte, N.C., a wave of foreclosures is leaving in its wake a band of starter-home subdivisions ridden with crime and falling home values, says Charlotte.com. Crime rates in 10 of the highest foreclosure-struck areas -- all built since 1997 with homes valued at $150,000 or less -- jumped 33% between 2003 and 2006, the site says. In some of these neighborhoods, homes are vacant and boarded up, with drug users taking advantage of the empty houses.
With their houses now worth less than they once were, homeowners are finding themselves trapped in these now blighted neighborhoods. "With all the foreclosures…there's no way I could sell my house for what I have in it," one resident is quoted as saying.
There are at least 50 neighborhoods in Charlotte that have foreclosure rates of 15% to 61% percent, resulting in rising costs for the city for police and other government services and for lost tax revenue, the article says.
Blue Chip neighborhoods
Forbes.com highlights 15 "blue chip" neighborhoods. All of the site's selections have kept or increased their value within the past 17 years, the article says. Among the picks: areas of the Pacific Palisades in Los Angeles, a nook in Manhattan's Upper East Side, the Walnut-Street area of Philadelphia, a neighborhood that circles Lake Shore Drive in Chicago and University Park in Dallas. For a full list, visit the site's slideshow.
Buy this house -- it's ugly
In today's sluggish housing market, some home sellers are turning to a somewhat unexpected marketing ploy -- they're highlighting their home's worst points to draw out buyers looking for a bargain, says a New York Times article.
One Minneapolis-area homeowner, after 10 unsuccessful months of trying to sell his home, created a Web site to market his house, which he calls "the worst" in his neighborhood, the Times says. Meanwhile, in Tucson, Ariz., a home seller advertised his home on Craigslist as a "$165,000 ugly house for sale," the article says. Although neither seller has found a buyer for his home, the worst house in Edina site has received more than 700,000 hits, according to the homeowner.
The market for "ugly houses" isn't new, the Times says. Dallas-based HomeVestors began buying up homes in need of repair in the early 1990s, and has recently awarded "The Ugliest House of the Year" award to a home in Sarasota, Fla., that had no windows and doors and played host to crack addicts and "other criminal types," according to HomeVestors.com.
Courtesy RealEstateJournal.com.