By Melissa Dittmann Tracey, REALTOR® Magazine
Staging a home to perfection can certainly get buyers’ attention, but pricing the home to sell is what often will get them in the front door, housing experts say.
With home values dropping across the country, a few sellers are still struggling to come to terms that their home may not be worth what they previously thought. About 77 percent of home owners believe their home is worth more than the recommended listing price, according to real estate professionals surveyed in the HomeGain National Home Values Survey. Yet, about 67 percent of home buyers say home values are still overpriced.
Nearby foreclosures can certainly influence a seller’s asking price. Foreclosures in a community can actually reduce nearby property values, on average, by $20,300 per household, according to research by the Center for Responsible Lending.
But many sellers can’t accept that their home’s value may be lower because of the houses down the street.
The sellers who tend to be overpricing their homes the most are the ones who bought post-housing bubble too, according to a study earlier this summer by Zillow.
Zillow found that home sellers who purchased their home in 2007 or later are overpricing their homes by an average of 14.1 percent. On the other hand, sellers who purchased their homes between 2002 and 2006 (pre-housing bubble) tend to price their homes about 9.3 percent above market value, according to the Zillow study.
"Post-bubble buyers seem to believe they escaped the worst of the housing recession, as evidenced by how they price their homes today," says Stan Humphries, Zillow’s chief economist. "But 2006 was just the beginning of the housing recession, and it is continuing in earnest to this day. That means that even people who bought after the bubble burst need to break out the pencil and paper and do serious research into what has happened in their market since they first bought their home, whether it was four years ago or six months ago. Overpricing homes causes them to stagnate on the market and keeps inventory from decreasing--not a desirable outcome for either the sellers or the market as a whole."