An overheated market
Harsh light cast on houses that aren’t selling right away
Peggy Bellar, a real estate agent in the western Catskills hamlet of Margaretville, New York, recalls the languid days of two years ago, when houses sat on the market an average 200 days before they were sold.
“Now we put up a listing on Wednesday morning and typically have it fully in contract with multiple bids by Sunday evening,” Bellar said. “So when a listing is taking longer or not getting the level of activity expected, we naturally wonder why.”
In this manic market with its slim pickings, a harsh light is cast on houses that do not sell right away. Within weeks, the leftover is tainted. It sinks to the bottom of Zillow and Realtor searches. Buyers note the paltry agglomeration of “views” and “saves” and ask, “What’s wrong with it?”
A better question may be: Is there an opportunity here that others overlook?
“If a house has been hanging on the market for over 90 days, it’s quite possible you’ll get a real value purchase out of it,” said Dale F. Stewart, a salesperson at Houlihan Lawrence in Millbrook, New York.
Stewart said she is working with a buyer who has an accepted offer on a property just outside Hudson, New York, that has been listed for more than a year. “It’s a true diamond-in-therough parcel with a few dilapidated outbuildings,” she said. “My client has a vision and is able to see past what previous buyers could not.” The offer is about $100,000 below the asking price of $575,000.
In this age of online marketing and sight-unseen purchases, a house might also fail to sell quickly if it has been staged and photographed poorly or if the photos exaggerate room sizes or retouch flawed surfaces so that buyers are disappointed when they do turn up for a showing.
“As 99% of listings are viewed online, photos are very important,” said Kyle Hinding of Coldwell
Banker Realty in Essex, Connecticut. “Some agents still refuse to use a photographer, and I feel it’s to the detriment of the seller.”
Even when pictures are professional, the story they tell may not be flattering. For instance, nothing says a house has been passed over like the image of a snowy lawn in June.
The interior styling of laggard properties can be off-putting or set the imagination on fire. Hinding had to talk reluctant clients into looking at a three-bedroom ranch house in Ivoryton, Connecticut. It needed “all cosmetics” and had an ugly aboveground pool, she said, “but the sellers had done all the heavy lifting: roof, furnace, hot water heater and central air.” Her clients paid a little less than the asking price of $317,000 and were treated to septic system repairs and asbestos remediation.
(Shoppers looking for bargains should take note when the listing displays a single exterior photo, as this one did. When interiors are out of sight, the buyer seeking a turnkey property is probably out of luck.)
Stewart described a $650,000 house in Kinderhook, New York, on the market for more than 275 days, as a “’70s love shack — it’s wall-to-wall carpet and superdated, but jeez, it could rock with $100,000 in.”
Other impediments to a sale are not readily visible.
It could be an owner who is emotionally attached to a home and repeatedly cancels contracts, or an owner who is willing to wait months or years for the “right buyer” to show up and pay whatever is asked.
In the case of a custombuilt four-bedroom house on 64 acres near Cooperstown, New York, which has been on and off the market since April 2019 and is currently listed for $549,000, the sticking point is the lack of highspeed internet. “It’s just outside an area that has already gotten fiber optic cable,” said Hazen Reed of Keller Williams Upstate New York Properties, who shares the listing with his business partner and wife, Susan Muther. Reed expects the service soon, but unless buyers know they can have it right away, “they’re nervous about taking the next steps.” (On the plus side, they have not seemed fazed by the home’s unsavory-sounding street name: Bedbug Hill Road.)
And some stubborn listings are simply unexplainable. “I can’t figure it out,” said Catherine A. Mondello, a broker in Dutchess County, about a 1950s ranch house in Hyde Park, New York. Priced at $369,000, the house has been sitting for more than two months. “It’s very neat, very well maintained,” Mondello went on. After showing it a dozen times, the only negative feedback was a wish that it was bigger. “I think it’s just waiting for the right person,” she said.
Agents say that ultimately, the three things that determine whether a house sells quickly are price, price and price.
“Proper pricing is key not only for selling a slow-moving property but also for getting the optimal price for any property in a seller’s market,” Bellar said. Or as Stewart put it, “Buyers are chomping at the bit, but they’re not stupid.”
When it comes to pricing, third-party websites like Zillow and Realtor offer useful transparency (to a point) but also contribute to the problems of sluggish properties, agents say. Buyers see a house’s sales history and draw their own conclusions about why a price has been reduced. But sometimes the story is more complicated than a few stats suggest, and the agent may never get a chance to explain it. Zillow’s habit of reporting how many people look at or save a listing further shapes negative perceptions. If the numbers are skimpy, viewers might assume something is wrong and move on.
Then again, a house that is not smothered with interest has its own charms. If enthusiasm for a home is dampened, Bellar said, it may be for no other reason than buyer fatigue. “Lots of people have been in numerous competitive bidding situations and are gun-shy at this point.”
Bellar had one final explanation for a moribund listing: “when everything has been done correctly” (including the all-important pricing), then it “may simply be a factor of the real estate market adjusting slightly.”