I just think that it is time to have a little heart to heart talk about this market.  I have been working  very hard in this market for 27+ years so I think that I am qualified to speak candidly about this market and these times.

I must admit that I wish that we had never seen the “run up” in real estate after 9-11.  We were doing fine in the markets, they had been improving steadily, businesses were stable and progressing and consumer confidence was rock solid.  Once credit became as easy to get as drive-in hamburger, my business went through the roof and into the stratosphere.  I personally did 117 closings and over $30,000,000 in closed unit sales without an assistant in 2004.  It was absolutely insane.   Once the word was out, we went from 130 real estate agents in our Board  in 2003 to 230 in 2007.    Well, when you are new in the business, you want to get a listing.  Our listed inventory doubled henceforth…and you know Economics 101 (supply and demand?)…we literrally killed the Alexandria market.   Sales have steadily plummeted and inventory has steadily risen.  You know what that does to pricing?  It goes down.  Until I see sales improve (the numbers start to go back up) and inventory start to show SOME sign of decline, will the Alexandria market pricing start to reverse it’s trend and go back up.

I am now seeing listings that are priced close to half of what they were in 2006 (they are still for sale).  30% less is common.   Let’s face it…the MARKET HAS FALLEN.    In my travels, I believe that I give good advice to people about their real estate here in Douglas County.   One of my key points in the listing should be that the property should be listed and sold within a reasonable length of time.  All of the components should be aligned for that event to take place.  What happens next is a combination of errors.   When a market declines like it has been doing for 4 years, Sellers are reluctant to reduce the price to get it sold in a reasonable length of time (I think that180 days or less for residential should be the goal for pricing).   Taking a loss on any investment is not an easy task for a human.  Many studies have been done on this subject, I don’t have the time to delve into that at the moment.  Anyway, if the price of the market does not fit the Seller’s price.  Don’t list it for sale.   Sellers and Agents DO NOT set the market price…THE BUYERS DO!  My job is to inform Sellers what Buyers are willing to pay for property in a reasonable length of time.   And let me tell you, that job lately has been extremely difficult.

Too many listings for a given market only further compounds the pricing issue.  The Local Realtor Board has budgeted for 165 agent renewals this year, so my business will probably see some more attrition in it as well as any other real estate connected endeavor.   This market will settle down, Sellers will know what their property is really worth in time.  In my prediction, I think that this market and it’s eventual pricing that is here will settle in for a long while.   Forget about explosive returns, think about cash flow and making the payment.  Better yet, think about paying off the debt!  The best house that I have ever seen is the one that is paid for.

Source:  Greater Alexandria Area Association of Realtors