Historic number of listings but few sales in 2012
By Kurt Steele

Despite historic low interest rates and a glut of homes on the market in Norfolk, there are few buyers.  Those shopping definitely want bargains.

Last year saw only 13 mutiple-listed homes sold here, 12 of which were at or below $365,000. With the exception of  one $3.95 million sale (for well below the $6.25 million asking price), the middle and upper ends of the market completely disappeared.

At one point last year, “listings numbered 48, an historic high for Norfolk, although by last month that number had fallen to 38,” according to Tom McGowan, head of Elyse Harney Real Estate’s Norfolk branch.

Betsy Little of Betsy Little Real Estate says the plunge in prices is taking time to sink into the seller’s mindset.  “Many potential sellers who want to sell for lifestyle reasons like retirement or downsizing don’t necessarily have to sell quickly,” she says. “Also, an owner who is not under financial pressure to sell can hold on to their property in hopes of a possible recovery.”

Little also reports that younger renting couples looking at the low end of the market up to $250,000 sometimes did not have the confidence to buy or could not qualify for a mortgage under some bank’s current tougher underwriting criteria.

The few weekender buyers who previously were looking at homes around  $500,000 are now looking in the $300,000 to $400,000 range for comparable property. But even at that price level, few have had sufficient confidence to buy.

As for homes priced in the higher brackets, buyers must be comfortable with significant upkeep costs and taxes. As reflected in last year’s greatly reduced $3.95 million purchase price, high-end buyers are particularly seeking bargains.

Little believes that the overall market will ultimately have to fall 30 percent or more from the late 2008 highs. McGowan says, “20 to 30 percent of some seller’s perceived value will never be realized.” Both are unsure where the market bottom is.

McGowan thinks “2012 may become a transitional year creating a new foundation for listing prices in 2013.” He also notes that there were an unusually high number of potential buyers starting to look at property in January, giving hope for a more robust year to come.