Wake Up America!

I recently listed a home for sale in my subdivision and as I usually do, I sent out postcards to my sub, heralding the good news. A couple of days after sending the cards out, I get a phone call. It's from someone who also lives in the subdivision and they asked "Is that asking price you have listed on the postcard, correct?"

Well, I replied "Why, do you think it's to high?"

The response was a stunner..."No, I think it's way to low."

So we chatted. Turns out this fellow subdivision homeowner had paid about $200,000 for their current home 5 years ago and had put quite a bit of money into the home in upgrades since then. Now, here I was, their local, friendly Realtor, telling them their house was worth 35% less than what they paid for it. I could hear the current homeowner hyperventelating over the phone!

I asked "Haven't you been following the news for the last 4 or 5 years. We've been in a deep recession here in our area and home prices have fallen drastically as a result. There have been many foreclosures and short sales driving prices down." The homeowner asked, so I offered my explanation of a short sale.

I was next asked, when this situation would straighten out. I said predictions are that home prices won't rebound to their 2005-'06 levels for at least a decade. The homeowner was stunned. "I and my spouse are in our early 50's now. By the time that decade is up, we'll be in our early 60's." I told the homeowner that I often joke with friends that I paid $72,000 for my current home in 1984 and pretty soon, it's going to be worth.....$72,000. Right now, it's probably worth about 120,000 after having been up to about 190,000 5 years ago!

Hopefully this was a lesson learned for the hyperventelating homeowner, don't live in a fishbowl. And, everything I've posted here is all true!