Premium ContentMouse over Home then click on Premium Content for information.When no one bites on a house she's trying to sell, real estate agent Jenn Hellman often pulls her client aside and gets a little personal.
She shares her own tough luck story: She bought her home in 2006, unaware that a housing bubble was about to burst, and she could never get back that amount if she were to sell today.
The disclosure has a way of easing a tense conversation that has become increasingly common as Realtors remind sellers of the cold reality that buyers today have an abundance of homes from which to pick. The good news, Hellman said, is that properties are moving if priced according to today's still-depressed market.
With her clientele, that sometimes has meant dropping a home's asking price 10 percent from its peak value. A recent study of repeat sales in the Omaha area put the average value lost since the 2006 peak at 20 percent.
"It took us all a while to get there," said Hellman, of Prudential Ambassador Real Estate. "But people who 'get it' are selling their homes."
Real estate agents have gotten better at educating sellers on effective pricing strategies, and that probably contributed to a recent uptick in residential sales, said Hellman and others. New statistics released by the Omaha Area Board of Realtors show that 970 homes went under contract in June — up about 3 percent from 943 the month before.
The latest sales figures represent a 66 percent increase over June 2010. But that huge jump occurred largely because the number of sales last June was artificially low: It was just the second month after the expiration of the federal stimulus tax credit, which had sparked a home-buying rush.
Vince Leisey, president of both the Omaha Realtors board and Prudential Ambassador Real Estate, described this June and the previous three months as a period of "not great but reasonably good activity." He said the more telling note is that the four-month string represented more stability than the local market has had in a while.
Based on the past several months, Leisey expects the rest of the year to be "fairly strong."
Mike Riedmann, president of residential sales for NP Dodge, attributed part of June's better sales numbers to lower gas prices that helped boost consumer confidence.
"When people were not feeling good about the economy, they decided not to make large purchases. Now you can see a little bit more optimism in the market."
He said "unbelievably" low interest rates also have nudged house seekers to take the plunge.
Georgie Vint of CBSHome has noticed more families willing to let go of a home at a less-than-desirable price because they've found a great price and interest rates on a bigger, upgraded home.
"They say, 'It's worth the loss because I'm going to gain on the other side.' "
Enough sellers are taking a loss that, according to a new report by researchers at the University of Nebraska at Omaha, average housing values — based on comparing repeat sales of the same homes — have dropped by 20 percent since 2006.
"It's not the end of the world," said Steven Shultz, a UNO professor of real estate and land use economics who tracks trends and led the study. "Values in some other cities have dropped 15 to 20 percent each year."
Indeed, Omaha weathered the first years of the housing crash relatively well. The hardest hit has come in the past couple of years and especially in 2011, Shultz said, as more foreclosed homes were sold.
The UNO report said that in the first half of 2011, 20 percent of residential sales were foreclosures, compared with 15 percent in all of 2010 and 8 percent in 2009. Shultz said he relied on the Board of Realtors' Multiple Listing Service for his data.
He said the increase seemed high and suspected it was because banks previously had been in a "holding pattern" and weren't following through on foreclosures as they are today.
Homes priced below $100,000 have suffered the greatest loss in value since the 2006 peak — an average decline of 33 percent, as opposed to a 5 percent loss for homes priced in the $300,000 to $535,000 range.
Overall, the UNO research showed that the Omaha market "is not recovering as quickly as people thought it would," Shultz said. "It's hitting us late."
When it comes to selling existing homes in this environment, the incentive to drop an asking price can be stronger for people who bought their dream home before unloading the one they're in.
Hellman recalled a west Omaha couple whose house lingered on the market for nine months. The empty nesters eventually lowered the price about 10 percent and sold the Candlewood house to move into a downtown condo.
Today Hellman is advertising a two-story home in the Tiburon subdivision at $40,000 less than its 2007 purchase price. The reduction followed a month during which similar houses sold but the five-bedroom golf course home didn't budge.
Hellman conducted an updated market analysis and met with her clients, who decided to drop their asking price.
"It's not an easy conversation to have, that's for sure," Hellman said.
Kelly Lewis of CBSHome calls that a "come to Jesus moment" — when, he said, Realtors and sellers get brutally honest with each other.
"We all think our home is the best and worth more than the neighbor's down the street because we have, say, blue paint on our wall. But you have to listen to the market."
He recalled a time in the mid-2000s when some 4,000 Omaha area houses were for sale, as opposed to the nearly 6,000 today that offer buyers more selection and an upper hand. "You either want to move or you don't," Lewis said.
The asking price, or possible price reduction, needed to turn a home depends on the area of town, said Riedmann of NP Dodge. He said bigger drops have applied to higher-priced homes in newer areas that compete with new construction. Housing values in some areas have remained steady or risen, he said.
"The key is to be competitive," he said. "You price based on your competition."
To be sure, experts agree, that price is the top factor — but not the only one — in determining whether a house sells.
Real estate agents and clients are taking other steps to make properties stand out, including creative landscaping, neutral paint and marketing techniques such as virtual tours.
Hellman employed staging strategies at the Tiburon home in Sarpy County. Still, she suspects the recent price cut to $400,000 gets the most credit for sparking new calls and interest.
"We've all gone through this learning curve," Hellman said. "But we're better educating sellers on pricing — and I think it's paying off."
Contact the writer: 402-444-1224, cindy.gonzalez@owh.com
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