Saturday, July 26, 2008

Just call me Cleopatra because I am the Queen of Denial

Pam Tillis had a top Country Western hit with the title Call me Cleopatra, Because I am the Queen of Denial. This song was about her unfaithful boyfriend who kept stepping out on her but she refused to accept the fact.

I was diagnosed with Diabetes, Type 2 back in 1996, 12 years ago. I never had unquenchable thirst, frequent urination, etc. That is the hallmark of diabetes. It is a very subtle and stealthy disease. I have been in denial ever since thinking the labs and the physician reading the labs are incorrect. I make that statement as my toes are turning numb under the desk upon which this lap top resides, right now.

What has this got to do with Real Estate? I find that a lot of folks who have decided to sell their homes at this juncture are in denial. You see houses coming onto the market that are priced just as if there has been no correction in the market. A Realtor can only suggest the price at which you should go to market. The Seller is the ultimate authority and boss of the pricing process. The Realtor is only a consultant. Most folks don't want to listen to the expert. After all this is my house. Just as I say, "Diabetes ???? This is my body, it is as sound as ever. Your labs are not correct." The seller says, " This is my house. My babies all came home from the hospital here. Why the Mayor lived just two houses down. That is all worth dollars."

Sorry folks. The news reports are true. We are dead in the middle of a housing downturn. We cannot deny the labs that come to us in quarterly statistics. Do you listen to the 6:00 local news? The 6:30 National news? We do not live in Utopia any longer. I suggest to my Sellers, " Take that number you have been carrying in your head, reduce it by 10% and we will sell your property." Stay with the denial number and we merely list your property. Deep down I know that folks want to SELL their property not just LIST it.

Consider this: In June of 2006 we sold 559 homes. In June of 2007 we sold 483 homes, In June of 2008 we sold 383 homes here in Tallahassee. That is a decline of 32%. In June of 2006 we had an inventory of single family residences 2579. In June of 2008 we have inventory reflected at 3331. That is 23% more inventory. Do the math. Fewer sales, Bigger inventory, Equal lower prices. Supply = Bigger, Demand = Lower, Sales Price = Smaller. 9th grade economics.

The numbers tell us that the appreciation rate we were used to has become flat. No longer do we appreciate at 10-16% per year. We are now much lower than that. Yet our median price is now about 228K vs 238k of a year ago. That is really soft compared to other markets in Florida that are down 28% and more. We are down about 5% compared to last year in median price. That is really fairly good news. It is taking an average of 100 days to sell a property that is priced well. It took 50 days a year ago. Properties that are not priced well sit for a year in some cases.

Pam Tillis and I are here to tell you. Her boyfriend is running around on her. I have diabetes. Your $200,000 house is not going to sell for $500,000. As Lillie Tomlin used to say, " And that's the trooooooooooooooth !"

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Pam Tillis sings: pam tillis-cleopatra queen of denial