Tuesday, October 16, 2007

A tale of two markets

There was an interesting discussion at the office today about the existence of two distinct markets. The first market is the market everyone is familiar with today. the market of depressed property value. The market of ever-increasing market times. The market of never-ending price-reductions.

The second market seems to be the golden market. Properties lucky enough to be in the golden market seem to be those that are perfect in every way. The perfect location. Perfect finishes. Perfect condition. Perfect decorating. Perfect presentation.

The perfect properties are the ones in good locations, of course, but you could say that about nearly any north-side property. But the perfect property is the one in the preferred tier; with the preferred view. Or the one that doesn't look out the back-side. The perfect properties are the ones that have been meticulously de-cluttered, perhaps even staged. The perfect properties are the ones that buyers walk through and don't see any issues.

Issues that used to be easily overcome are now quite challenging. There are so many properties available for buyers to choose from today that it is a simple matter to move on to a different property rather than having to deal with issues in a property that would have been good enough in the past.

We have experienced this phenomenon in action this year. Some of our inventory flew off the market in quick fashion, and some lingers with us after months upon months. From this experience, here are some tips for making sure your property comes across as perfect.

No burned out light bulbs. It seems odd to have to actually write this out in black and white, but we have a listing that has been on the market for 8 months and we just can't seem to get the owner to change the light bulb in the overhead light in front of the kids bedroom. It's in a hallway with a tall ceiling and it's a recessed light - so not such an easy task, but would have been much easier while the owners lived in the home before moving away with their ladder.

Pull the weeds in front. We had one listing that lingered on the market this year and the owners asked us over and over again for any tips and suggestions on how to prepare their home for more positive perception with buyers. Each time, we recommended taking some time to tending the front of the home; pulling weeds and picking up blowing trash. The owners kept the inside of their homes as clean as could be, but since they always came and went through the rear garage, never paid any attention to the front of the home. It did go under contract, but only after 7 months on the market.

Paint. In this market, today's price seems to be last years price minus five percent. On a $600,000 property, that's $30,000 less than we could have received at the beginning of this year. A professional paint job will probably cost between $2,500 and $4,500 for a home like this. But a fresh and contemporary paint scheme is the most reliably solid way to make a home feel like it's brand new and ready for move-in. Experiences with owners this year have ranged from walls that look splotchy from touching up with the wrong paint color, to stained ceilings from long-ago repaired roof leaks. Both of these items cost our owners months of market time.

Check out this Virtual Tour of a listing that went pending in Lakeview in 22 days. I would be surprised to learn that someone even lives here. It's so perfectly staged. A buyer is presented with a perfect home that appears to be ready for immediate occupance - and even more importantly - enjoyment.

Then look at this Virtual Tour of another condo in Lakeview in the same price range. These units are similar in size, in age, and in a similar type of building. But this home lays all its issues out on display for any prospective visitor. The television in front of the window and the giant rack of A/V equiptment tells prospects that the living room is too small for their stuff. The exercise equipment in the master bedroom causes the buyers to be confused as to the purpose of the room. It certainly doesn't lend to the feeling that the master suite is a sanctuary or retreat. Even the outside space comes across feeling cheap because of the out-of-character patio furniture squeezed awkwardly into the corner.

Even the most minor issue can send buyers looking elsewhere in today's market. Sellers, address all your decorating and maintenance issues immediately. Each delay seems to be compounding exponentially in our experience adding weeks and months onto your market time.