Madison Wisconsin Homes and Real Estate: Reasonably Competent Human Being (RCHB)

Wednesday, September 1, 2010

Reasonably Competent Human Being (RCHB)

I think I am. Not brilliant by any means, but reasonably competent. I base that opinion on my awareness of my logical approach to conclusions. Illogical positions confound me. Now I don't believe there has to be a scientific explanation for everything, in fact logic suggests science can not answer all questions because it is not possible that all science is known today. So, as an RCHB (I saw that term in a book by Jennifer Allan a real estate agent mentor extraordinary person) I'm not perplexed by the real estate market. Nothing is going significantly up in the short term. There are no indicators of UP.

Let's look at interest rates: Interest rates are pretty much at an all time low. Would you say there is a 50/50 chance that rates will go up in the next 60 days? Well, November is coming up and elections are scheduled so do you think we will see interest rates go up? I don't. Would it be logical to conclude the evidence suggests rates will remain stable? I do.

What do we know about home prices and interest rates? Do we agree lower rates do not drive significantly more buyers into all markets. Lower interest rates drive some home owners out of the buyer market and into refinance. And in times when interest rates have been historically low for many months, the majority of buyers who wanted to take advantage of historic rates got in earlier---the pool of buyers who can qualify for the best rates is rather shallow by now. If the number of buyers entering the market doesn't move the needle the competition will remain cool. Right? Right. I thought so.

Do we think more buyers are coming into the market? Maybe. There are always new buyers coming in for one reason or another. What about this: Will more homes be brought to market by distressed sellers and distraught bankers? Yup. Hmmm...supply is going to exceed demand. Rates will be stable. How about jobs? Will unemployment go up or down or sideways? Let's assume it goes down. More people working, more people fully employed might stop the slide of sentiment. That'd be nice. Until more people feel more confident, more patience is going to be required.

Seems logical to me---A reasonably competent human being.

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If Not Sold in the First 30 Days, Successful Sellers Conceded The Price

Through Mid-September, thirty seven percent (37%) of 126 home owners who sold in 2010 sold without making a single price concession. They typically attracted a buyer within 40 days of going on to the market. These successful owners conceded little on price as they sold for about 97%-98% of asking price.

Those who counted time on the market by months or even quarters eventually sold for an average of 91% of their initial asking price. Price reductions improved their success opportunity. Once their price was reduced to a price favorable to a buyer, the time on the market was short--about 34 days from last price change to accepted offer.

See September 20, Buyer Enticing Pricing

Disclosure

The source of data: South Central WI MLS Type of data: Single family homes and maybe condos and maybe other Areas: Madison and other areas such as McFarland, Shorewood Hills, Middleton, Maple Bluff, Oregon, DeForest, Cross Plains, Dane County, Fitchburg, Verona, did I say Middleton? Dates covered in these blog posts: January 2010 and continuing.

All comments are the relatively well thought out opinions of Tom Meyer. Those opinions are not necessarily shared by Restaino & Associates, other brokers, or the national, local, or state associations of Realtors... in fact, they may be significantly different.