Westchester View

Whenever I go on a listing appointment, I generally find that the seller already has a “number in their head” about what their home should sell for.  This number can come from various sources.  It is – unfortunately – almost always higher than the current market can command.

In truth, I can’t blame sellers for this…their minds have been levered to continued price increases to such an extent that the current market has left most sellers blind sided.

The first thing I often hear is that “I need to get X out in order to buy my next home which I can now get for Y  because its gone down in price.    The trouble if the property you want to buy has gone down so much in price, chances are the property that you want to sell has gone down by a similar percentage.  Wishful thinking is often the culprit here.  Markets are fluid – that was fine when prices were going up – but it also holds true when prices decline.

Misinformation is another issue.  Many sellers look at what their neighbor is asking for their home.  Asking isn’t getting.  Many listings are overpriced  in this market – so setting your price on the basis of other listings is not a wise strategy.

“But my neighbor sold their house for X just six months ago!”  Six months is a lifetime in a depreciating market.   If your market is depreciating – and many markets still are – then prices have decreased over six months.

Zillow zestimates and other information on the internet may or may not be accurate.  Zillow has been off as much as 25% in our area.   So if the zestimate of your property seems too good to be true, it probably is.

If you need to sell, price your home competitively – this is particularly important in a declining market where inventories are high and buyers are few. Overpricing your property will result in fewer or no showings.  The property will sit as the market declines further – resulting in an even lower price down the road.   Overpricing a home is just about the worst thing you could do in this competitive market.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

Back in the bull market days of 2005-2006 the notion of needing to “stage” your home for a faster sale was nearly laughable.  But home sales in the Westchester market are not what they once were.  As  most seller’s are painfully aware – this is not 2006.  There is ample inventory on the market, prices are down and buyers are increasingly picky.   Things once deemed insignificant now become major stumbling blocks to a successful sale.

Increasingly, listing agents, myself included, are encouraging sellers to stage their homes prior to putting them on the market.  That includes, but is not limited to painting, pointing up and arranging furniture in a way that maximizes the potential of the space and creates a neutral atmosphere.  We ask that seller’s depersonalize the space so that buyers can “mentally move in.”

Although I am not one to spend a homeowners money needlessly,  there are times when I feel staging is essential.  Staging is most beneficial in the following cases:

An Empty Home:

When the sellers have moved out – they tend to leave an empty shell of a house that used to be a home.  That house can tend to lack personality and be all too forgettable  to a prospective buyer. Right now there is an excess of inventory that is completely unfurnished and after a while they can all start to look the same to buyers.  If a house is in danger of becoming that forgettable – it needs staging in order to stand out in the eyes of buyers.
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The housing market in White Plains has taken a drubbing since the stock market crash of 2008.  Although some adjacent areas are showing small signs of stabilization, the same can not be said for the city of White Plains. This is ironic because White Plains was at the epicenter of the housing boom for Westchester County.

White Plains  NY Cooperatives:

Cooperative prices were actually up slightly over the same period in 2008.  However, this slight uptick might be do to an increase in the proportion of 2 BR units in the sales statistics.  The previous quarter showed a grim 17% price reduction and recent sales in specific complexes indicates that this downward trend is continuing.  Since 2 BR units are suddenly far more affordable, buyers are finding that they can afford a larger unit.  Sales volume is down 17% over the previous year and the current inventory of 9 months indicates a buyer’s market undergoing  a price correction bordering on double digits.
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It is very interesting that just as consumers are demanding ever more hyper-local content  and knowledge from agents  that we are also seeing another distinct trend in the opposite direction:  the tendency to list and sell to larger and larger geographic areas.

The contrast between old-school hyper-local agents and the newer nomad agnet was driven home to me while I was working with two listing agents who still work exclusively in small niche markets.  I was at a closing with one of them and she implied that since I had the entire city of White Plains to cover, why didn’t I simply refer out the client who finally bought in Scarsdale?

Can a real estate agent be too local?

I knew that the attitude about staying hyper-local is alive and well though it appears to be a staple of old-school real estate.  Still, I was more than a tad surprised.  Scarsdale is not the moon.  It is the town directly adjacent to the west side of White Plains and about a whopping six miles from my front door to the center of the village.  If we followed this line of thinking to its most extreme would mean that a buyer potentially moving from New York City to Westchester NY would have to have as many as five or six agents to explore all the possibilities open to them that were within about 30 minute commute.    For the consumer this seems most unwieldy if not highly impractical.  Could you imagine the mountain of agents all crawling over each other for the buyer’s attention?  What a mess. Not to mention a monster of coordination.

From the agent’s perspective, there could also be a danger to being too local. What if something happens to that small segment of the market you represent?  If your geography/price range are razor thin – you are setting yourself up for trouble.  This was clearly seen this year when agents who specialized in small high-end markets got creamed because jumbo loan issues bit them in the backside.   Another listing agent I encountered was used to selling about 10 major properties a year – but this year had only managed a single sale.

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This is a story about selling your home during a housing recession.

Sellers with homes listed today will be able to identify with some of the antics that buyers in a bear market will pull.  But this is about a listing that was active 14 years ago in 1996 – during another deep housing recession.   I wasn’t a real estate agent at the time,  I was a seller.  My mother had just died after a prolonged illness and I was listing her house for sale.  The house in question was a beautiful 1932 Tudor sitting on prime property with sweeping golf course views in wonderful residential area in White Plains.  There was a good deal of emotion involved since the home in question had been designed by my Grandmother and built by my Grandfather.

Although I wasn’t an agent  I was smart enough to read the newspapers and  so I know it was a crummy market.   The house would have been worth roughly $600k just a few short years ago – but in 1996-1997 I was hoping for about $550k – but knew I would probably only see a litte more than $500k. Gut instinct told me to rent the place, but my co-executor was adamant that the house had to be sold.

Nothing prepared me for the crazy home buyers that came through looking for a “deal.”

90% of them were bottom-feeders looking to steal a house – and looking for ANY excuse to chisel  the price to the bone.   My beleaguered broker  came to me with all sorts of concession requests – some of which made  sense.  But more often than not, the requests bordered on the absurd. Some of the more hilarious issues are worth noting because when we see frustrated sellers – we need to be aware that their pain is real and that some of the crazy concessions being asked by buyers can be truly ridiculous.

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Scarsdale NY housing has been in the cross hairs of the housing recession for a while now.  Initially,  it was resistant to the correction taking place in other parts of the country.  Eventually the forces that had hit other parts of the country so dramatically, came home to roost even in the most resilient areas of Westchester.  Real estate values in Scarsdale NY came under prssure as inventories swelled.  The drop was severe. However, some of the numbers show  signs of  a bottom being at hand.

Cooperatives:

The number of co-ops sold are  down 15% over the previous year.   This is a trend that has been seen in other parts of the county and reflects the difficulties in obtaining financing.   Currently there is a nearly 8 month inventory on the market. However, prices remain slightly higher than the previous year, (5.4%) indicating a market that is stabilizing.   There are some mixed signals here.  the inventory is still high however, the pricing is surprisingly robust.

Single Family  Homes – Scarsdale:

After a “pop” during the 2nd quarter prices have once again fallen and are down 27% over the 3rd quarter of 2008.   Swollen inventories are going down.  Right now inventories are approaching th 6 month mark.
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In surfing the net, I discovered an on-line version of an article by Ben Brody and Laura Gurfein that appeared in last months Westchester Magazine about the county’s “top” Realtors. The subtitle declared “In good times or bad, whether buying or selling, these are the agents you want on your side.”

Now, I have nothing against the Realtors who were chosen  as the finest agents in Westchester NY real estate. None at all.    it was fascinating to see how the authors chose to define “success.”  They used a simple unbiased metric  – the bottom line.  They defined success in terms of .sales volume in dollars.  The theory being – the bigger the sales volume the better the “track record.”  This kind of boggles my tiny mind.  In a twisted way it reflects the public antipathy to Realtors in general because it emphasizes that “success” is defined in dollar signs.

This got me thinking – how exactly should one define success in real estate?  How should these bottom line numbers like sales production and number of listings held factor into a home owners decision about who to sign a listing contract with?

Well, realistically, an agent has to achieve two goals.  Certainly, over time, the agent must be able to turn a profit or they will go out of business.  This is much harder to do than most people outside our industry think.  I have to make a living this way and turning a profit is absolutely essential or my bills don’t get paid.  But for all the delusions of real estate agents being “rich” without any effort, the failure rate is enormously high – north of 80% in most of the country (over 90% locally.)  So posting sales volume  is a major component of success.

But, what does this do for the client? The home seller or home buyer?  The article indicated that whether selling or buying – these agents were the best.  But by looking at sales volume only, the article missed the mark altogether.

1. Is this agent primarily a listing agent or a buyer’s agent?  If they have an even number of sales in both categories – fine.  But I looked at the sales history of a couple of these superstars. They were primarily listing agents and did relatively few sales as a buyer’s agent.

2. On the listing side, what is their success rate?  After all, an agent can make a bundle listing in volume. The percent of listings that actually sell is another matter.To that end I took a look a closer look at a “top agents” sales record for 2009.   I picked an agent on the list at random and found the following.

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Part 1 of “This Brokerage Has 750 Listings…..So they must be the best! ” was prompted by the fact that the Westchester NY real estate market had changed and as a result,  I was getting more and more questions about what a brokerage brought to the table in terms of marketing.   I emphasized the importance of choosing the right agent and that the brokerage itself was of less importance.    I also indicated that there was a lot of smoke and mirrors  regarding  brokerage brands and what that means to the seller in terms of marketing the home.  Also, for those consumers who would like to see broker/agent input on Part 1 of this post…you can go to my blog on ActiveRain where I re-posted the blog.  It got a good deal of attention and much commentary from real estate professionals.

In the end, I  promised a sequel  that got into more specifics.  So here it is – six  major myths about  listing a  property and marketing a property that are often trumpeted by our own industry.  Its been said that if you repeat something often enough it becomes “fact” in the eyes of the consumer.  So let’s put some of these “facts” to rest.

Myth #1 – “We have  12 billion to the 10th power  active listings, so  our reputation speaks for itself!”

Really?  How on earth does anyone come to that conclusion?  You can have all the listings in the world, but if you can’t sell them, what’s the point?   The percentage of sold listings is a bit  more pertinant. However, even that number does not discriminate between individual agent performance.

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Does size really matter?  Do the number of listings or the size of the brokerage have anything to do with the ability of the agent to market and sell a home successfully? Is it the brokerage or the agent that is the determining factor?

What Does the Brokerage Bring to the Table?

With the Westchester NY real estate market in a downward trajectory,  sellers realize that they need more than a sign in the ground to move their property.  In truth, this was always the case, but these days I’m getting more and more questions about marketing the listing. One of the biggest issues  I encounter on listing presentations  are questions regarding the brokerage itself.   Most questions revolve around marketing.  What does the brokerage do in terms of marketing  for the listing?

I think that most sellers assume that since the brokerage is “big” and has capital behind it, that they are the ones spending  big bucks on marketing the home.  But this is rarely the case.   Many big-box national brokerages build on that confusion and perpetuate the myth that their brokerage “brand” makes a significant difference in selling a home for top dollar.  They also tout their “marketing package” in terms of the amount of support they offer.  Some actually stress that the number of agents in the brokerage somehow makes that brokerage better or somehow more able to move the property.   With all the hype and misinformation out there it is small wonder that sellers are confused.

I  would challenge these large brokerages who claim that their numbers speak for themselves  to enumerate exactly WHAT  they do to justify their claims?  And while they are at it, I would like to have some hard numbers to back up their success stories.  I haven’t seen any of them come up with any marketing advantage that holds up under scrutiny.  Most of the time they appear to be blowing smoke.  Don’t get me wrong, I’m not slamming big brokerages. That would be rather foolish since the brokerage that I am currently associated with is quite large.  What I am trying to do is cut through the hype.
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One of the many issues confronting  first time buyers and  those who want to “downsize” is that many crave having an outdoor space.   Cooperative life isn’t always conducive to having outdoor space, but the coops on Garth Rd. are an exception.  The park that runs behind the Bronx River Parkway side of Garth Rd. creates a wonderful “back yard” for the residents.   For those who crave outdoor space and easy to footpaths.  The area, called the Garth Woods Conservatory offers a quiet oasis from the usual street and village traffic and appears to be popular with many of the residents.  I took advantage of some extra time I had and took a short walk along the Conservatory with my dog Jade.  We ran into several canine friends along the way as well as several people who were happy to meet my dog…I wasn’t nearly so interesting.

As can be seen from the photos – many who live along the Garth Woods Conservatory have a birds eye view of the woods – with gardens or terraces having a view of the woods.

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