Buyers Discover What It Takes To Sell as Inventories Mount

As the number of residential properties on the market swells and prices in some locations fall, homeowners discover that homes in better locations or with sought-after amenities are selling the fastest.
By: Lauren Baier Kim: The Wall Street Journal Online
Inventories rise; home sales plunge

In August, home sales took a dive in many large cities across the U.S., according to a The Wall Street Journal Online article. Among the places showing the biggest drops in the number of homes sold were California, Florida, Arizona, Massachusetts and the Washington, D.C., area, the article says. Nationally, the number of homes on the market rose 4.7%, according to the Web site. As a result of the market downturn, buyers may take their properties off the market, and home builders are offering incentives to spur sales, the article says. Prices in some U.S. locations for newly built homes are down 10% to 15% from a year ago, the article says. "We believe that the housing market is still in the early innings of a hard landing that will likely take several years to develop," one housing analyst is quoted as saying. Use an interactive tool to track inventories of homes for sale in 15 large metro areas across the U.S.

Prices falling in Los Angeles

Patience may be a money-saving virtue for Los Angeles-area home buyers, according to an article published by the Los Angeles Times. Home buyers who wait out the market could stand to profit, with home prices forecasted by one real-estate professional to drop 2% to 3% yearly for the next three to five years, the newspaper reports. "Prices are going to be a little weaker a year from now, and there'll be more listings and more choices," one real-estate professional is quoted as saying. The median home price dropped from $493,000 in June to $492,000 in July, and the number of residential properties sold was down 27% in July from the year before, the article says. Yet, the Times cautions that timing the market for when it hits rock-bottom could be tricky, and could result in missed-out real-estate deals. "If the timing is right and you've seen a home you like that has gone down in price, why not get in the ballpark?" the paper quotes one local real-estate agent as saying.

A crop of 'lemons' in New York market

Some New York apartment owners who purchased during the housing boom are learning that they own real-estate "lemons," or homes that are difficult to sell, says an article published by the New York Times. Which is a shocker to homeowners who have come to believe that "a 20% increase in your value of real estate was like a constitutional guarantee, kind of like life, liberty and happiness," the newspaper quotes a real-estate professional as saying. Sellers are finding that buyers, thanks to the slowing real-estate market, are less likely to purchase flawed properties, or homes with negatives like blocked views; "walk-up" access only; a lack of interior light; an extensive need of repair or renovation; and high maintenance or other fees, the article says. Soaring construction costs are also turning buyers away from apartments requiring renovation, the Times notes.

Chicago sales slow; placing blame for cooling market

Following a national trend, the housing market has cooled in the Chicago area, according to a Chicago Tribune article. In July, sales of single-family homes dropped 18.6% from July 2005, while condo sales fell 8.4%, the article says. There are 40% more homes on the market than a year ago, yet home prices increased 4.3% and condo prices rose 6.1% over the year period, the newspaper says. So what is behind the cool down - both nationally and regionally? Several suspects have been blamed, from a "bubble-obsessed" news media, to lenient lending policies to real-estate speculators who bid up real-estate values too high, the Tribune says. "A lot of realtors are angry at the media," the paper quotes David Lereah, the chief economist of the National Association of Realtors, as saying.

What it takes to sell in Denver

With the Denver-area housing market facing the worst resale market since the early 1990s, local sellers are discovering that a home's location and quality figure prominently into how quickly it will sell, says a Denver Post article. Selling the fastest are residences within the city or within a short commute of the metro, well-maintained properties, luxury homes, and residences in popular school districts, the newspaper says. Harder sells are residential properties further out from the city, those in mountain and "fringe" developments, and homes that lack sought-after amenities like hardwood floors, granite countertops and fully finished basements, the Post says. Baby boomers are fueling sales for low-upkeep lofts and town homes, as well as for properties with main-floor master bedrooms, the article says.