In an effort to cover the good, the bad and the ugly of the housing decline I’m following up on a prior series of posts that chronicled the former National Association of Realtors (NAR) president Thomas M. Stevens’ inability to sell his own home.Back in September of 2006, as the Stevens’ Great Falls VA home, priced at $1,450,000, sat vacant on the market for over 350 days, the Washington Post and CNBC’s Diana Olick caught up with the then NAR president for what inevitably became a very embarrassing interview in which Stevens clumsily suggested that if he had only listened to his Realtor and lowered the price, the house would have sold immediately.
More embarrassing yet though was the fact that even after over 750 days on the market, in the Fall of 2007, the home still sat vacant with only a slight price decrease seemingly indicating that although Stevens had appeared to acknowledge the downturn, his optimistic outlook overrode better judgment.
Finally in May of 2008, after approximately 960 days on the market, the Stevens home sold for $1,050,000 or 27.58% below the original asking price.
So what’s the moral of the story?
If you are Bulli$h, I suppose you could point out that the value of the Stevens home grew from its original purchase price of $49,500 in 1979 to a lofty over one million dollar sale some 29 years later which, viewed simply and without consideration to basic carrying costs, easily beat inflation and probably the general appreciation of most other investments.
If you are Bearish, this multi-year running anecdote clearly demonstrates the weakness of the housing market whereby even one of the nations most savvy and experienced real estate professionals found it virtually impossible to sell his home without a nearly 28% price reduction.
Further, although many current home sellers have found themselves in the same position as Tom Stevens, many cannot afford to wait 960 days or withstand a 28% price reduction without risking financial ruin.
