HometownGeorgetown.com

Time for our weekly look back at home sales here in the beautiful city of Georgetown, Texas. By now, you know I’m an optimist by nature. But I have to say, I am very encouraged by this week’s numbers. In the period between February 4 and February 10 of 2006 (our record year), 12 homes were sold in MLS areas GTE and GTW for a total of $2,388,508. In the same period in 2007, 11 homes were sold for a total of $1,669,322.

This year, 20 homes sold for a total of $4,438,457!

In large part, this sharp increase is because local buyers have been made nervous by the national headlines over the past few months. Only now are they beginning to realize that the outlook here in Central Texas is excellent. We are not going to experience a “popping bubble” because we didn’t have bubble-type growth. In California and Florida, home values were increasing by 20% or more per year, while salaries were not. That kind of growth simply can’t be sustained long-term. Here in Central Texas, we saw home values rise slowly but steadily.

As you can see from the chart at the left, we are still seeing a significant number of price reductions. Sellers are realizing that their expectations were unrealistically high. Sellers determine the price at which they want to market their home, but buyers have 100% say-so on the sales price. Buyers control the purse-strings. Sellers can decide not to sell a home, to hold onto it until the market swings back in their direction, but they cannot decide how much a buyer will be willing to offer.

The twenty homes that sold this week were on the market everywhere from 8 days on up to 280 days. I took a look at the listing for the house that sat on the market for 280 days before selling because I was curious to see why it took so long.

The thing is, there was nothing obviously wrong with this house. It was fine. The home is in Sun City, and it was listed for less than $130,000. Two bedrooms, one bath, like other homes in Sun City. It simply never came in first place in buyers’ minds. Buyers who were looking in that price range found another home that they liked just a little bit better. Over the past year, five two-bedroom, one-bath homes sold in Sun City. The other four were on the market between 4 days and 75 days before selling. The four buyers who were looking for this size of home liked another home better every time. Each time buyers looked, the home that was on the market for 280 days came in second place.

When you’re selling your house, you need to come in first place. Yours needs to be the prettiest home available for the price. If you come in second place, you lose the buyer. And you could come in second place a hundred times, or a thousand. In fact, when your home is on the market a long time, it’s more likely to come in second place in a buyer’s mind because homes somehow lose their luster just because they’ve gone unsold for some time. Buyers wonder why other buyers didn’t like it, and they worry that they might be making the wrong choice if they buy something that so many others have rejected.

What about the house that sold this week after only 8 days on the market? What made it so special? It’s a three-bedroom, two-bath home in the highly desirable family neighborhood of Georgetown Village. The listing agent said on the listing that it was “truly the cutest home on the market” in the Village. By the speed of the sale, I’d say that wasn’t an exaggeration. The price point was right, too, at less than $170,000. Right now, there’s only one house listed in the Village for less than $200,000. And by the way, that house came in second place to the home that sold after just 8 days.