All real estate is local … city views from the street (Part I)
Ask any real estate professional what they would warn a buyer or seller to steer clear of and they would tell you without hesitation: the national real estate news. Why? Because each real estate market has an individual story all its own. When a consumer reads a story in a national magazine or watches a show about real estate on TV, the individuality of each market seems to morph into a Stepford Wives syndrome.
To set a good national real estate story straight, you need to debunk the myths of each market and go straight to a local real estate professional.
I discussed some national real estate concerns with real estate professionals in different markets. These real estate markets all go to school in the U.S. and may bear some resemblance to each other, but they are as unique as the punk rocker, the cheerleader and the geek.
Because all real estate is local.
Skip Smith, real estate agent and Connect2Agent member, told me:
“The housing boom started in California, then moved toward Las Vegas and into Salt Lake City real
estate, like a locust migration. It died out after it got up into Ogden and we were left sitting with a whole bunch of new construction in which investors handed the keys back over to the banks and walked away from the houses.”
(Salt Lake City real estate snapshot courtesy of Skip Smith.)
An epitome of this situation was a new construction development in the southeast part of Salt Lake City. Smith had a listing where the seller had purchased the property at $1.25 million in a market where the property should have appraised at no higher than $999,000. The seller is now listed at $795,000. The bank will end up eating a short sale on this property when it sells.
There were nine other houses in this subdivision that were sold with inflated prices like this.
As far as the real estate industry is concerned, Smith saw many real estate agents getting into the business from May 2005 to May 2006: “So many agents got into the business and are now starving. It’s a buyer’s market in Salt Lake City Utah, but some real estate sellers end up listing with whoever estimates the house value the highest, even though in the end it sells for less than originally valued.”
Smith recounts a story of a listing he was competing for against four other agents. He quoted the homeowner a list price of $249,000 with a predicted sales price of $243,000 to $245,000. Another real estate agent got the listing, who had priced the house at $264,900. The final sales price when the house closed was $244,500.
As to the overall health of the market? Salt Lake City is not as bad as the rest of the country, Smith said. The interest rates are at 6.5 percent, much lower than most of his 26 years of selling real estate. He believes Salt Lake City is at the bottom now, so it’s a good time for real estate buyers to get out and purchase.
To be continued …
Posted by Rebecca D. Levinson
