You didn't mention the most dangerous category of seller- those that think they're a 4 when they're actually a 1. Case in point: My wife and I were in discussions with an older couple this spring. They're in the process of building a house down near Fredericksburg. Some good friends of ours live just down the street from them, and gave us a heads-up that they were looking to sell.

To put things in context: we're solidly 4's - bought in 98 before the market took off, refinanced our 30 year mortgage near the bottom (5.25%), love our great TH community. But we're also thinking that we'll outgrow the TH in a few years as our little ones get older. So we decided that we should at least talk to this couple. After all, avoiding realtor commissions on a house over $750k is a nice savings.

So we talked to this couple late last year, then again in February. They've got a beautiful house, one in which we could easily raise a family. But they blew us away when they said they were looking for $925k in a private transaction. I had told the wife that, based on comps, I would expect them to look for $750-$825. So they were considerably above what I considered a realistic sales price. But their logic was "our new house won't be done until December, so we can afford to price the house high and see if we get any bites."

They listed with a realtor at $975k in May. After about two months they dropped it to $949k, and recently dropped it again to $925k. I expect it won't sell unless/until they drop it at least $100k more.

The lesson to this story is simple: selling real estate in this market is not like fishing. You don't price your property at an unrealistic level thinking that maybe someone will bite. The longer the property sits on the market, the more buyers will say "something must be wrong with that house if it hasn't sold".

I fear this couple is learning this lesson the hard way. They called us last week to mention that they were renewing the listing, and that they have a clause allowing us to buy the property without paying a commission. Unfortunately for them, we can realistically afford $150-200k less than what we could have in the spring (as units in our neighborhood have lost value and interest rates have inched up).

Beth: Just did a quick search for 3BR, 2BA, 2-Car Garage in the neighborhood that I think you are referring to. There are 18 homes with this criteria on the market, 2 under contract and only 6 sold since January 1, 2006. The minimum asking price is $400,000 (under contract with DOM = 0) and the average for those listed is $485,000 (DOM = 76). It is hard to zero in on potential comparables Without knowing the exact address of your grandmother's property. If you can send me the address (via email) I can give you a quick assessment without seeing the home. It would be better to see the home and then visit those around it that are also for sale. That said, in general, a steep discount will usually bring a buyer quicker. You just don't want to leave money on the table if you don't have to.

I know I have to sell my mother's home. She's just entered an assisted living facility. The house is in eastern Loudoun County (agghh, I guess, at this point), and it certainly isn't in "model condition". I've decided to stop trying to fix it up and price it way low to try to move it. There's nothing structurally wrong with it (newer roof, all new windows and doors, everything works), and I had it professionally cleaned for a whole lot of money. Needs carpet and paint and some kitchen cabinets.

I'm going to put a 3 BR, 2BA single family home, with 2 car garage, with a little deck backing to woods and a creek on the market for $349,000 and see if it moves.

Every other home in this neighborhood has a "for sale" sign out front. Nothing is selling, as far as I can tell, no matter what condition the house is in.

Am I crazy? Should I price it even lower? She's paying taxes for a home assessed at over $100K higher than the selling price. She can't afford to pay the retirement home monthly fee and a mortgage (which is just about $165K) for much longer.

Harriet makes a good point about the zero-sum game. But, if selling in the $500,000 range and buying in the $300,000 range the percentages may be the same for price reductions but the total dollars are obviously not.

Alby,

You desire to move to Winchester, correct? The market there has a 13-month supply of homes right now. I noticed Brookfield and others had some good prices on inventory homes in Berryville.

If you can buy a house there and your children get to stay home with their Mom, then why does it matter what your home sells for back East? I am sure you'll be getting the same % off of the new home as you're "losing" on the old one.

It's a zero-sum game, really, unless you decide to sell out and rent in Winchester (and you may wish to run the numbers for that scenario as well).

If you desire to wait out the market until "hell freezes over", then why not do it in your house in Winchester? If home prices recover, they'll recover there as well.

I do hope for your sake that your home sells quickly. When we sold in March 2005, our agent suggested a price of 789K. I said no, put it on for 779K. Then we dropped it to 765K. It sold. The new homes in the development were going for 100K more, and after I sold for 765K, the guy up the street got 799K. Then the person next door got 829K. That was the last sale our development has had for months. Folks now are asking for prices all over the map, and some are still are holding out for *more* than we got last Spring, which was a crazy peak. I don't feel like they're serious about selling. They're reaping incredible historic gains (homes were purchased new in '03 for 600K). Even if they could sell 3 years later (2006) and break even I would consider that a blessing from a historic perspective. Instead, they want 200K more.

The price is $599k and I'll wait until hell freezes over before I lower the price any more.



On the upside, your kids will be in high school by then, so you won't be needing to spend on daycare anymore.

Frank, look at the numbers. July 2005 788 Units Sold in Loudoun County with an Average Price of $550,128. In July 2006, 515 Units Sold with an Avg. Price of $531,713.

So prices are down a meer 4% from last year, even though sales are down 35%. I don't see where this massive corrective price adjustment is coming from. People (just like me) are saying, "We'll just wait it out". All the "I gotta sell now" folks are gone. Everybody who is left can wait out the glut, because they have no pressure to sell dirt cheap. But the bigger factor is that homes are still selling. Down from 788 last July, but still a strong 500+/mo. I'm sure it will trend down in the Fall/Winter months as it would for normal seasonal adjustments.

Frank, I guess you are right. I am a gonner. Lar

Alby, I hope you are right. However, the brakes appear to be slamming on all over the nation on property sales, to a greater or lesser degree by locale. As an extreme example, WCI's Tower subsidiary reported an 82.6% drop in condo sales for the quarter. Granted, that's probably at the bad end of the scale, but I think it is illustrative of where the broad RE market is going (including NoVA).

Again, I hope you are right but I think not. It seems to me that the economy still looks good because most economic data has substantial lag built into it. When the current and impending layoffs from realty, mortgage, and construction trades are all fully developed, I think it may look quite different.

Frank: 10/years? I doubt it. The Economy is still good. Unlike real estate issues in the past that always followed some economic recession. This real estate problem is nothing more than a Supply/Demand Glut sitting on the back of a booming economy. Prices have declined 5-10%, but if anybody is expecting a 50% or more decline, they'll be waiting until the end of days. Unless the entire US economy falls into the toilet.

The rule of thumb right now on prices appears to be, Condo=$200,000+, Townhouse=$400,000+, and Single Family=$600,000+... And I think the average price for home sales is running around $540,000 and holding steady. And thanks to the Fed for holding off on raising interest rates, there is still a good outlook down the road of clearing this inventory glut. I'd say, once we drop from 4500/units to around 1500-2000/units across Loudoun Co, the market will be back to normal. Thats just my uneducated theory.

Alby, it took about 10 years or so for the market to reach these ridiculous prices. It could take 10 more years to unwind to realistic prices. So you may be waiting a while.

Lar, there is no hope...

I'm Type 4. I'd like to sell so I can move my family west into the same size house for 1/2 the price and switch from a 2-income family, to a 1-income family. Because Daycare is costing us $1500/mo. But I can wait out this market. It stinks, but our dream will have to wait. until all the "I gotta sell now" and "I can't afford this" people get cleared out. I'm not shaving off one red nickel. I had my home appraised for $653k and I have it listed for $599k and we've yet to receive 1 single contract. I'm not going to give my home away just to execute a sale. I'll leave the giveaways to the "I gotta sell now" and "I can't afford this" people. The price is $599k and I'll wait until hell freezes over before I lower the price any more.

We are thinking of selling. I think we are number one, two, three, and four. Lar