Last Updated on Saturday, 12 July 2008 18:05

Need versus want? Need to buy, versus, want to buy! What we are seeing in todays real estate market is one where people are buying and selling homes based on a need rather than a want. People were in the market because they wanted a bigger home, or they wanted to move to a different town, or they wanted a second home.

Need versus want? Need to buy, versus, want to buy! What we are seeing in todays real estate market is one where people are buying and selling homes based on a need rather than a want. People were in the market because they wanted a bigger home, or they wanted to move to a different town, or they wanted a second home.

In todays market, people are in the market because they need to make a move to a different town, perhaps for a job change, or they need a larger home, because of additions to the family. There is real motivation to be buying or selling.

Reality has sunk in, prices are down and we seem to have hit a a floor in prices. Sellers who do not have an immediate need to sell have just taken their house off the market rather than chase the prices down. This is reflected in the lower inventory this year compared to last.

I do not think we are done with prices dropping quite yet. There are still a great many bank owned properties and vacant properties in the market. That means that there is great motivation to sell. Eventually the bank owned and short sale properties will have to go, and the prices will come down. How exactly these properties affect the overall market is unclear because I don't think a bank owned property compares to a property that has been properly cared for.

I have seen the bank owned properties, they are not pretty. So I am not sure that these properties can be compared to the majority of homes on the market to assess value. Which brings me around t my final observation this month...

There is no fire sale pricing in the bank owned market. Buyers seem to have the perception that they can pick up a bank owned property at 50% of the list price. I do not know where this perception is coming from, because I am not seeing it. Really low offers are getting rejected. Even in the Manchester multifamily market, which is really bad right now, the average selling price is 95% of list for homes sold over the last 3 months. Of course this is for properties that have a reasonable asking price.

The lesson here is to study the prices of homes that have sold recently to determine market value. It is more important than ever to know the facts about sold prices.

One last note: June ended the second quarter, so all of the quarterly charts and tables have been updated. Enjoy!