Even though inventory is down there are over 200 homes for sale in Chisago County. About half of those have recent price reductions. The median list price is currently $242,500 and the median marketing time is 86 days. The median selling price for December, reported so far, is $200,000.
This week I received a call from a seller who had her home listed with another broker. She asked me to tell her why her home wasn’t selling. After reviewing the listing, I saw that she had unnecessarily done 5 price reductions over the past several weeks. In addition to this being a slower time of year in real estate, the photos showed the worst of the property and the remarks made the property sound like it had been destroyed by renters. The house has some great features, and the needed repairs had been made but the listing hadn’t been updated. This is a 4 bedroom 2 bath home for less than $145,000, which is a good deal!
Buyers have been conditioned to look for new listings and avoid “stale” listings. They depend heavily on photos and remarks. My advice is to look at the aged inventory as there are amazing values there, especially in January before the market heats up. There have been many times when I have showed a “stale” listing and found an additional bedroom or bathroom that wasn’t listed on the MLS, or there was a den that could be converted to a bedroom for less than $3,000. I have also found the mechanicals had been updated along with a new roof, and none of that was mentioned on the MLS. Sellers are also much more likely to negotiate a lower price right now, as they are anxious to move on.
Now that interest rates have started to rise, waiting to buy will cost you money. For example, if you want your monthly principle and interest payment to be about $1,000, you can afford to buy a home for $209,400 at 4.1% interest. If the interest rates go to 5.1% your purchase price will be reduced to $186,200. Rising rates, can greatly impact the buying power of first time home buyers and new construction.
For my clients that don’t have to sell, I recommend removing the listings from the market in December rather than doing price reductions and increasing the market time, when less people are looking. There are currently 20 homes in Chisago County that are temporarily not available for showings. Most of these will be coming back on the market soon.
An experienced real estate agent can help you find hidden values and can recommend a lender to provide actual monthly payments based on your finances.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.