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2011-03-16 08:23:35
Utah Sellers - Resistance is Futile

'It’s a price war and a beauty contest right now, and if you want to sell, you have to be priced right and look good.” - Salt Lake Board of Realtors President DeAnna Dipo

The new market reality

In Salt Lake County, two-thirds of closings are for homes priced at less than $250,000. “Buyers are really uneasy — they are worried prices are going to fall,” Dipo said. “So they press for the best possible deal they can get. And in this market, they are probably going to get it.”

Resistance is futile

Despite these realities, Dipo said, there are some sellers still trying to find someone willing to pay what their home might have been worth a year ago, two years ago or even three. That’s why she can’t help swinging by a Sandy home that has languished on the market at $300,000.

“They’ll never get that much,” she said during a walk-through. In fact, she believes it will end up selling at right around the low to mid-$200,000s.

There’s nothing wrong with the property, she explained. It has a nice roomy backyard with a deck, waterfall and gazebo. But it’s just priced much too high, especially for its average interior condition and amenities, she said. There are too many other competing properties with similar amenities that are in top condition and priced more realistically.

“It needs to be cleaned up and they need to drop the price. It’s a price war and a beauty contest right now, and if you want to sell, you have to be priced right and look good.”

What 200K can get you

At the height of the Wasatch Front’s real estate market, finding a home in great condition for around $200,000 wasn’t all that easy. In fact, depending on the neighborhood, it could be difficult — even impossible.

But after three years of post-bubble price declines, something in that price range in move-in condition is vastly easier to come by.

Today, the median selling price in Salt Lake County is around $200,000, meaning half the homes sell for more, half for less. And as Salt Lake Board of Realtors President DeAnna Dipo demonstrated on a recent tour of homes for sale, you can get a nice house and neighborhood for that amount of money.

Destination Sugar House

At the market’s zenith, those who wanted to buy in popular areas such as Sugar House in Salt Lake City faced slim pickings in the low $200,000 range. The patch of neighborhoods, roughly bordered by 900 East, 1700 East, 1700 South and 2700 South, has always been sought after, with homes typically selling at a premium.

Dipo remembers well the frustration of buyers in 2006 and 2007. “It was hard to find anything nice, updated and clean in Sugar House even for $285,000,” she said.

But on a recent weekday, Dipo showed a home at around 900 East and 2700 South that was all that — in fact the interior looked much like a model home. It was bright, airy, clean and tidy, and the asking price was $219,000.

Before the downturn, “this could have sold for as much as $300,000,” Dipo said. Although the home was built in 1915, it’s been remodeled and updated, with features such as granite counter tops. It has 2,160 square feet, a large lot, a two-car detached garage, an outdoor patio with fireplace and a separate mother-in-law apartment with small kitchen.

Even though it’s in great condition, Dipo said the home’s seller probably will still have to come down a bit on price — probably to about $200,000 — because of its location on a busier street. Many potential buyers are fearful prices will continue to deteriorate and are trying to get the best deal possible to hedge against further declines.

In a bind in Kearns

More and more in this market, Dipo finds sellers who would consider themselves lucky to be able to sell their properties for just enough money to cover their mortgages. But in real estate, it doesn’t matter how much you want to sell your home for or how much you owe the mortgage company. All that matters is what a buyer is willing to pay for it.

In Kearns, Dipo finds a listing at $194,900. The recently divorced seller needs to sell, and he owes about as much as he’s asking, so further price cuts are out of the question without him bringing cash to the table or trying to negotiate a short sale.

Although the home is priced much lower than it would have been at the market peak in 2007, it’s still far above this neighborhood’s median selling price of $138,000 — which is down from just over $172,000 the year before. Most buyers in this area seem to be looking for homes priced at $150,000 or less, and there are less expensive properties in comparable or even better condition.

That is why the seller is offering a lease-to-own option and even seller financing — someone who couldn’t qualify for a home loan could take over his payments. But so far, no takers.

It’s all about cost

In Draper, Dipo arrives at a home that looks great —inside and out. Listed at $209,900, it is smaller than most on her tour, coming in at only about 1,673 square feet. But it’s tidy, looks new and is in a great neighborhood.

However, in this market even that combination doesn’t mean a home will sell quickly or near the asking price. “This is a perfect listing,” she said. “But it probably needs to be priced at $200,000 or even a bit under that amount before it will sell.”

Like other homes Dipo inspects this day, the veteran Realtor wonders how much, if any, the homeowner can budge on the asking price without having to bring cash to the table at closing or without having to resort to a short sale, in which a lender agrees to accept less than it is owed. Many homeowners are in a tough spot in that regard, she said.

By LESLEY MITCHELL | The Salt Lake Tribune | First published Feb 26 2011 12:42AM

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