Live

Watch CBSN Live

Expert: Home Prices To Stay Steady In '07

It will be steady as she goes for housing prices in the new year, according to real estate expert Mark Nash.

On The Early Show Thursday, the Chicago real estate broker, author, and syndicated columnist told co-anchor Julie Chen things aren't as bad as they've been portrayed.

"The market, in general, is made up of many local markets," Nash said. "But I think prices are stabilized. In some states, like Texas, we're still seeing a big rise in home appreciation. I was talking to a real estate journalist in Syracuse, N.Y., and he's like, 'Oh, Mark, we're just starting that rise up."

Overall, predicted Nash, "We're gonna be somewhat plateaued, price-wise," though he stressed it's difficult to characterize the nation as a whole.

Nash points out that personal income hasn't kept up with home price appreciation, and that's resulted in prices finally stabilizing.

It's not a buyer's market, Nash says. Buyers perceive that the pendulum swung in one fell swoop from sellers to buyers last year, but in reality, we are in a balanced market, where no one is driving real estate transactions. Prices have flattened or even declined two-to-five percent, but homes that are priced right are still selling within six percent of their asking price, and extremely popular homes still command multiple full-price offers.

Nash says he firmly believes the first half of 2007 will feature many "deferred demand" buyers — those who sat on the sidelines in 2006 with concerns about buying at the top of the market, and those who were struggling with high gas prices. The demand from those buyers may even be strong enough to spur some spotty market frenzy, as we saw in 2004-2005. The last two months of 2006 saw some of the strongest market activity of the year, and that's usually a very quiet time, even in a hot market. Nash feels that activity bodes well for 2007.

Based on all that, what advice does Nash have for buyers and sellers?

BUYERS

  • Don't make low-ball offers: In the current balanced market, making a low-ball offer on a correctly-priced home can backfire and alienate sellers.

    "I think buyers really perceived in 2006 they were gonna be driving the market, which was so contrary to the previous years," Nash said to Chen. "They're like, 'Oh, yeah, we finally have some power,' and sellers, if their home was priced right, they knew it, and they had recent comparables from the last six months. So, you bring in a low-ball offer on a priced-right home, and sellers are going to say, 'No, thank you.' You might alienate them."

  • Beware of home valuation Web sites: "A lot of people have started to go to the Internet to use for home searches," Nash told Chen, " … and it's a great tool. But the biggest problem with the home valuation Web sites at the moment is they rely on public records for recently recorded deeds and mortgages. In some areas of the country, it can take up to six months to have a deed or mortgage recorded. You want up-to-the-minute information, which at this point, the best database for that is your local is the multiple listing service."

    SELLERS

  • Don't utilize incentives: Nash has seen sellers offering to throw in flat-screen TVs, cars, and more to entice buyers. But, he says, buyers aren't buying into these "mark-up to discount" tactics anymore. So, cut to the chase and lower your price up front.
  • Limit the number of open house you have to one every three weeks, tops. Endless open houses speak to desperation. Buyers know this and track it.

    NEW FEATURES EMERGING AS SELLING POINTS

  • Upscale Garages: No longer an out-of-sight, out-of-mind dumping ground, garages are decked out with cabinet and storage systems, durable-but-residential-looking flooring, and even mini-fridges, insulation, heating and air-conditioning.
  • "Snoring Rooms": Smaller, second bedrooms located adjacent to master bedrooms. As the name suggests, the rooms offer relief from a partner's "buzz saw," and is a luxurious alternative to the couch.
  • "Man & Mom Caves": Personal, dedicated spaces for one person in a household, serving as sanctuaries where the person can work on projects or simply chill out without being disturbed.