The Sacramento Bee reports from California. “Just as when the market was rising spectacularly and sellers simply priced their houses thousands of dollars higher than their neighbors’ sales prices, homeowners, real estate agents, builders and even appraisers confess to some sense of winging it on the down side these days.”
“The old standby of measuring comparable neighborhood sales is proving undependable amid falling prices, excess inventory of resale and new homes and reluctant buyers who firmly believe prices will fall further still.”
“‘It used to be a mathematical equation,’ says Placer County real estate agent Kate Tustin. Now with a record inventory of houses for sale, she says the old math has given way to quantifying a house’s ‘emotional component.’ On such vague notions of the heart does pricing now rest.”
“Real estate agents have spent much of the year complaining that homeowners were in denial and refusing to cut their price despite daily evidence to the contrary. Many are still resisting. (Broker) Mike Lyon says the market may decline another 10 percent, and still sellers aren’t convinced.”
“‘About half the sellers are out in la-la land,’ he says. ‘That’s better than before. Half are serious and are starting to reduce their price. I still think only 10 to 20 percent of the market is priced to sell.’”
“That doesn’t surprise Barry Schwartz, professor of psychology and economics at Pennsylvania’s Swarthmore College, who has studied the issue. For most people, he says, the joy felt when investments such as housing gain in value is greatly outweighed by the pain felt when those same investments lose money, even when the loss isn’t real at all.”
Tags: Mortgages, Real Estate, Homes, Market Conditions
