My lots in St. George
October 31st, 2006 by KenricIt’s funny that I mentioned my lots in St. George on my post just two days ago where I said, “I have no idea how my lots in St. George are doing. I’m too afraid to call my realtor. I figure that I’m probably down $10k on each one.”
I got an email from my realtor this morning. The email said:
Hi, Ken
There has been some serious reduction in the competing lots …recently. Would you like to reduce the price of your lots to remain competitive? Please let me know by responding in writing to this email. The lots range now from $88,000 – $110,000. Yours … at the top end. If you wish to come down but not exactly to $88,000, you may want to consider at least $92,000. Please let me know what you would like to do. General activity in our market is very slowly improving.
Well I’ve been thinking of dropping the price for a while now. I’ve seen homesellers here in Phoenix and California do the $2-$5k drop per week thing and they’ve ended up dropping the home around $20k-$25k total with no luck. I do not believe that reducing prices by $5k or less will help you sell in this market.
I think that you need a drastic drop to bring in buyers. I’ve seen sellers drop prices $50-$60k and immediately get their homes sold back in June 2006. I’m sure they are happy because the surrounding homes using the $5k reduction steps have come down to their price finally but are still not selling.
With that said, I don’t think that dropping my lot prices to $88k or $92k to equal the competition would make them sell. I’d really like to get rid of one lot to free up some capital. I’m willing to take a loss a lot. I know can make up the loss with the freed capital. Therefore I told my realtor to price my lot at $75,000. I’m 15% under the next closest listing. If I don’t get any action at that price, there’s no way the lots at $88k will…
Posted in Real Estate | 8 Comments »
Stumble it!
It is kind of frightening to hear that house prices are beginning to drop, and so quickly. I hope the waves of change take a few years to travel up to the Great Lakes basin, specifically to the Canadian side!
Is Pheonix one of those areas that are highly overvalued compared to the rest of the United States?
My area in particular has not seen as great an increase in housing prices as most of the US, and many parts of Canada (Vancouver, Toronto, Calgary, Edmonton), so I’m hoping once the correction begins, that my area will not take a drastic hit.
By NLG on Nov 1, 2006
NLG, I would give it a year at the most. 1 year comes around real fast. Back at the end of 2004, I figured that the boom would last 1 year. I was pretty much correct, but I waited too long. If you think the boom will end, you need to sell 4-5 months before that date.
Phoenix had a huge run up in prices in the past 2 years. It is considered a bubble market and inventory is at an all-time high.
By Ken on Nov 1, 2006
Excellent, undercut the competition. The knives come out and the race to the bottom begins!
As a renter, I’ll be watching from the sidelines. I have no interest in buying a depreciating asset. As the price goes down, the number of potential buyers shrinks.
By Anonymous on Nov 1, 2006
You should ask your realtor when the last lot sold in that area and what the price was. That would give you some idea of where selling prices are at. $75K may even turn out to be too high.
By UBU50 on Nov 1, 2006
The last lot sold for $100,000 last week. It has a better view than mine though.
By Ken on Nov 1, 2006
NLG – Detroit and some other mid-Western markets are the worst hit.
By moom on Nov 2, 2006
$75k seems low if the lowest is $88k unless your lot is a lot worse. Why not try $85?
By moom on Nov 2, 2006
Moom,
I really don’t believe that undercutting the lowest by $3k will help. I think that’s just a slow death. We’ll see if $75k even gets any action. It may not.
By Ken on Nov 3, 2006