List Price vs. Sale Price Difference diminishes

Banks and sellers are getting more today than a few months ago in the Apple Valley real estate market.  Even though home buyers are paying substantially less than a few years ago their negotiating power is diminishing with a tightening real estate market. The median price of single family homes has risen over the last 3 months in the High Desert area.

Nationally Buyers paid a median of $6,525 (about 3 percent) less than the last listing price on homes bought in August, down from $7,018 (about 3.3 percent) less for homes bought in July, according to a recent report from Zillow. Negotiating power peaked in January 2009, when buyers were paying 4.5 percent less than last listing price, a median of $10,096 somewhat similar to the High Desert.

Sellers are continuing to reduce prices on unsold homes nationally something we are seeing very little of here in Apple Valley. One quarter (24.7 percent) of all homes listed for sale on Zillow had at least one listing price reduction as of Oct. 1, 2009. For the U.S. as a whole, the median U.S. price reduction was 6.6 percent off the original listing price.

Several Metropolitan Statistical Areas (MSAs) in Florida made the top 25 list of markets nationwide with the greatest gap in list price to sale price; no MSA in California made the list. In two California markets, buyers paid more than asking price during August, according to the report: In the El Centro MSA, buyers paid 2.2 percent, or a median $2,479, more than asking price; in the Stockton MSA, buyers paid 1.3 percent, or $2,515, more.

Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supplies of housing will continue to translating into less of a discount off the asking price of homes.

With the active spring and summer home shopping periods now over and the First Time Home Buyer Tax Credit ending November 30^th we could be looking at some restoration of buyer negotiating power.  The wild card will be if

foreclosures rise again, if inventory levels head up in the coming few month’s buyers' negotiating power may regain the ground it lost in August.

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