Price It Right...and They Will Come

Lenn Harley has a current post about home prices outpacing incomes.  She is exactly right.  It was only a few years ago that we could get buyers into homes here in Alaska for less than they were paying for rent.  I remember advertising in Wasilla and Palmer that we could get buyers into a brand new home for less than they were paying for rent on a 2 bedroom apartment.

The recent price run-up has put those days away.  It seems that in most places in the country, even here in Alaska, the payment on the average home is too high for the average income.  This will have to change before we can get rid of our inventory.

In a few places, incomes will rise enough to make up difference between prices and incomes but most of us will have to wait for prices to come down to reality before sales will pick up. 

I noted in a recent post on my off AR blog that we have seen a price increase in my area of just over 7% a year.  That has not been nearly as large as many other parts of the country.  Because of that, I don't think sellers are going to have to take as large a hit as they are in Los Angeles, or Pheonix, or Las Vegas. 

But sellers in my area still need to come down to earth. I posted a warning on my most recent post about price.

We still have a good enough market that if a house is priced right, it will sell quickly.  We need to look at the competition and just beat them,  We don't have to price homes at the levels they were in 2000, we just need to price them at the current market.  Of course, that market is always changing, and we need to take a look at it every 30 days or so. 

We have a large inventory of unsold houses, the truth is that many of these houses will likely not sell for a LOOOOONG time.  Those houses are just clogging the MLS system.  But then we have an active market just below the price of those houses.  Many of these homes are selling in 30 days or less at full asking price. 

The difference?  The successful sellers understand reality, not wishful thinking.