Record-Eagle,  May 20, 2006                Cookie McCullough

Should You Sell in a Cooling Market – Yes or No!!

As the spring selling season moves into high gear in northern Michigan, the cooling housing market is upending the conventional wisdom that have guided sellers during the recent housing boom.

We are over one quarter of the way through the year. The marketplace has softened but is still relatively good. There have been warning signs that there would be a market slowdown for some time. These warnings were based on the fact that the hot markets we’ve experienced over the last six to seven years simply cannot maintain their accelerated pace for much longer. Hot streaks always come to an end. We’ve seen this shift coming for some time, so it shouldn’t have caught anyone by surprise. Just as the hot market did, this cooling market will eventually be replaced by another new market condition. The good news is that no one is predicting a prolonged dry spell.

There’s no way to know, at any given point in time, the very best time to sell. This can only be known in hindsight. It’s possible that the home sale market hit its peak for this cycle sometime during the past summer. This doesn’t mean that you’ve missed the boat. It means that the market is different than it was earlier in the year.

The "homes for sale" inventory has increased in the last 60 days in northern Michigan. If this trend continues, your property value will probably decline. Say goodbye to the days when you could simply look at what your neighbor’s house sold for and then list your for 10% more. Pricing is absolutely critical now. A great thing to do is to look at properties that are priced comparably to yours and ask, “Which would I rather buy?” Agents should be advising sellers to make sure their house comes across as a good value relative to other homes on the market.

If you believe that you cannot afford to stay in your property for several years while the market goes through an adjustment, now may very well be the best time to obtain the highest possible price for your property. A prospective real estate agent should be able to keep you updated with the latest data so that you can make the best financial decision possible for selling your home. Your agent should be advising you as a seller to price your home in the bottom 25% of comparable properties and cut the asking price by 3% to 5% if the listing doesn’t generate several showings or written offers within three to four weeks.

With a slowing market, you should look for an agent who makes things happen. When the market is changing or perceived as being challenging, there are three elements that you should use to select an agent to talk to about buying or selling your home. First, look for a successful top producer. Next, look for an agent who specializes in the type of property that you are selling such as waterfront property or luxury homes. Finally, look for an agent who you can connect with emotionally.

Today, as the time it takes to sell a home is rising, consumers are quickly starting to become more selective in the agent to call. They are looking for agents who have the knowledge and professionalism so as not to lose the wealth their real estate has created for them.

For people who need to sell, a realtor may be saving you thousands (and in some cases, hundreds of thousands) of dollars. Do not think this is a request for a listing from a Realtor®. Instead, it’s about providing you with data that supports the best course of action for you. If the inventory increase continues and prices do start to decline, stay up-to-date.

Soaring gasoline prices already are changing consumers’ economic perspectives, and inevitably that seeps into homebuyers’ mind-sets when shopping for property.

If you are selling into a market that is shifting toward cool-down, or will be shortly, hold back on the greed impulse. In cooling markets, unless you snag the increasingly rare, totally clueless buyer, record-setting asking prices won’t get you many offers. As a seller, price your home realistically for your market’s emerging dynamics.