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Columns

Stubborn sellers make home bargains elusive

By JAMES THORNER, (Un)Real Estate
Published January 18, 2008

When I mentioned two weeks ago that Tampa Bay area home sales prices had fallen 21 percent during the previous 18 months, many readers reacted with an exasperated, "Where do I get a piece of that action?!?"

Someone even quoted me the old Mark Twain favorite: "Lies, damn lies and statistics." The implication was that the number was an attempt to shroud reality in pixie dust.

Buyers are told the market is so lopsided - 41,000 home listings chasing fewer than 2,000 monthly buyers - that bargains abound. Yet when they try to haggle down a home price, sellers recoil as if someone were demanding a pound of flesh from their firstborn.

Why the discrepancy between statistics and supposed reality? Where are all the hard-up sellers?

For one thing, the median home sales price can trend lower even in the absence of genuine price cutting. That's what happens when price-shy buyers steer to smaller, less expensive homes. You saw that happen with the increase in townhome sales.

Another reason is more obvious: Sales prices record just that - homes that have sold. These days, that grocery basket includes a ton of homes hobbled in various ways: short sales, fire sales, foreclosure fixer-uppers.

Heard about all the homes selling for 60 cents on the dollar? Probably not. That's because many are snapped up by investors before the general public gets a glimpse. When the average buyer sees them they'll have been marked up and relisted.

Among the armies of less desperate sellers, people are reluctant to give their houses away. Pinellas County home sales data show a large gap in many neighborhoods between asking prices and sale prices. It's a sure sign of sellers who haven't come to grips with the glut.

In December in south St. Petersburg, 50 of the 1,207 homes listed for sale actually sold. But most of those 50 sellers had to cry uncle. Their average listing price was $352,000, a number that had plunged by closing to $310,000.

Little noted by statisticians are the no-sales and the near-sales, the deals that fell apart over price. If you're a buyer negotiating with a stubborn seller, you can be excused for thinking the 21 percent price decline is just a bunch of fluff.

[Last modified January 17, 2008, 22:30:35]