Homeowners Becoming Desperate to Sell -- Start Burying St. Joseph Statues All Over to Sell Homes

I think we're all aware that the U.S. real estate market is starting to cool down (though it's still too soon for real estate vultures to get a great deal). The only question remaining is -- how low will it go? Here's a piece from Money Central that details the decline. It starts with an example of a homeowner becoming desperate to sell. The details of this particular story are as follows:

Margot Ray, a radio-ad saleswoman in Stockton, Calif., put her five-bedroom, three-bath house on the market in February for $480,000.

There it sat, along with about 3,000 other homes for sale. She dropped the price to $465,000 in April. Nada.

In July, she had a brainstorm: Why not advertise on the radio? The ad put the house on the map. Now agents remember the address. The price is down to $427,000 and, at a recent open house where Ray raffled football tickets and a spa day, 15 groups of potential buyers showed up on a 107-degree day. But it still hasn't sold.

Ouch, that's a big hit. Down over $50,000 so far and no sign of a buyer. How low will prices go?

Yes, it's just one story, but this story is being repeated all across America. Oh, what a difference one year makes:

Was it only last summer that houses sold in a day, buyers were bidding up prices and sellers in some markets haggled down real-estate agents' commissions? Nationally, 39% more "existing" homes -- not new ones -- are on the market than last year this time.

This situation is forcing sellers to get creative:

In the toughest markets -- including the Florida cities, Detroit, Atlanta, Dallas, Stockton, Sacramento and San Diego -- incentive is the name of the game. One Florida agent offered a Mercedes-Benz with a house sale. Others dangle vacations or gift cards with thousands of dollars in gasoline.

I always thought a "buy this house and get a car free" offer would certainly get people's attention. Who knows -- it may end up that even this isn't enough and sellers will have to band together to offer "buy one get one free" deals on homes. Yikes!

Unfortunately, there are signs that the bad news is spreading:

In its report released Aug. 15, the National Association of Realtors reported that 26 of 151 metro areas experienced outright price declines in the March-June quarter. The biggest price drops in percentage terms were in Danville, Ill., where home prices fell by 11.2% in the spring compared with the spring of 2005, and the Detroit area, where home prices were down 8%. For condominiums, 1 in 4 metro areas reported a decline in prices.

And, for me, some information that hits very close to home (I live in Michigan):

Michigan, where automakers have laid off large numbers of middle-class workers, is one of the most difficult places to sell a home. The Detroit News reports a 43% increase in homes on the market since last year.

Good thing I'm not trying to sell my home right now. In fact, this news may even help my plan to make money on the real estate downturn. Though I'd still rather see our state doing better where house prices are concerned.

I'm also in a better position financially than most due to the financial principles I've followed (and talk about here on Free Money Finance):

People who bought recently and have little equity are in the most difficult situation, says Vince Rizzo, managing partner and broker for HungryAgents.com, a St. Louis-based referral service through which sellers negotiate with local agents for lower commissions. "There are so many people now that borrowed 95% or 100%, and with the market slipping back a little, and you have to pay 6% commission, you are going to have to bring money to the table," Rizzo says.

I have not bought recently, I have 100% equity in my house, and I don't have a risky loan of any sort.

Finally, if you are truly desperate to sell, there's the "tried and true" method of burying a statue of St. Joseph:

To some sellers, it can't hurt to enlist a little heavenly intercession. Myth has it that a statue of St. Joseph can be buried upside down in a property to enhance its chances for sale. The Charlotte, N.C.-based CatholicCompany.com sells a St. Joseph home sale kit, including statue, instructions and a prayer. It's a popular seller, says Les Teahl, customer service manager, but no more now than before.

Teahl and his wife recently got the kit to help sell their home in Charlotte. He recommends against burying it. Instead, he advises, put it in a place of honor, a spot like the corner of his home with an American flag, a big crucifix and photos from his son's wedding.

"We've had people do that and next day the house sold," Teahl says. "It's got a high success rate."

Oh, yeah, that's great financial advice -- for the guys selling the statues. ;-)

One way to avoid lots of the risks associated with buying real estate is to follow a great formula for buying a house. If you're one of the few buyers out there, I suggest you take this advice to heart as you look at potential homes.

Comments

[Rhea]

I live in a very Irish Catholic area, and let me tell you, St. Joseph always shows up at times of real estate strife. Funny thing is, you only hear about a lot about it when it helps to sell the house. All the other folks who plant St. Joe in the pachysandra keep quiet.

[Hazzard]

I've noticed that houses are taking forever to sell around here and only a few months ago were selling at top dollar in 8 hours. It's amazing how the tide has shifted, although I've felt it coming for quite awhile. The media sure does pile on, which I think perpetuates it even further.
Hazzard

[Duane Gran]

Isn't Saint Joseph the guy who couldn't get a room for his pregnant wife in Bethlehem? I dunno... doesn't sound like a good charm for home sales to me.

(I'll be doing an extra hail-Mary in penance for the above)

[G.S.]

I asked St. Josepph to help us sell our house last year and it sold within a week to the third person who looked at the property. HE DOES WORK FOR YOU.

[Eric S.]

You mentioned the "buy this house and get a car free" thing in what seemed like a tongue-in-cheek manner, but they're doing it here in Northern VA. I've seen two in my neighborhood alone. And they still aren't selling.

[Rich Damios]

Hi,

(First, thanks for the great site.)

Second, i have a question rather than comment...

How would someone(busy) with little, to none realestate knowledge/contact be able to track the "market". Currently I rent, and will resign a yr lease because I think the market is still in a downtrend...

That being said, how, rather than tracking saint statue sales, would one recommend is the best metrics to watch a city's real estate market.

thanks