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Wednesday, November 01, 2006

Home Staging Tries To Fight Slowing Market

Another sign of the times down in Olympia, where this story posted on October 22nd highlights the difficulties some would-be sellers are having finding interested buyers.

The plan was to buy a steal-of-a-deal house on the east side of Olympia, remodel it and resell it quickly for a tidy profit - pretty much like they do on TV.

But that was 10 months ago, back when South Sound's real estate market seemed almost un stoppable. After nearly four months on the market - and a few painful price reductions - Arle and Elisa Seaton of Tumwater, and their agent Craig Gunn, recently decided to enlist the services of staging professional Karen Nielsen.

Her mission: to bring the vacant, architecturally dated 80-year-old house to life - to help make it look more like a "home" by employing rented furniture, plants and accessories.

"I thought if anything is going to sell this house, that's what's going to do it," said Gunn, who has worked as an agent with Olympia Real Estate for about four years.
...
"Your house is a commodity now," said Sterling Stock, an agent with Windemere Real Estate in Olympia.

"Yeah, you're staying there until it sells, but it's a competition, and you are competing for a limited number of buyers. They're going to compare your house to all of the other houses they're looking at."
...
Earlier this year, Stock hired Nielsen to stage a home that had sat on the market for about four months. It didn't need much work.

"We added some window treatments," he said. "We took out a bunch of their furnishings that just didn't lend itself to showing very well."

The outcome?

"It sold in seven days," Stock said.

The Seatons are hoping for similar results after they host an open house from 2 to 4 p.m. today. The 2,375-square-foot home at 1008 Tullis St. in Olympia is listed for $329,900.
Since the story was posted ten days ago, I was curious to know whether the magic bullet of staging did the trick for the Seatons. Apparently not, since the home is still listed as "active" on the MLS. Bummer.

Unfortunately, I get the feeling that the Seatons (who paid $239k for the home last November) are going to need more help than a staging can offer. The most recent (September) MLS statistics for Thurston County show residential listings up 95% from last year, sales down 17%, and a median sold price up just 2.4% since they purchased the home—essentially stagnant since hitting $250,000 in February. Furthermore, a search of the Thurston County assessor's office shows that just three properties in the neighborhood have sold for more than $300,000 so far this year.

I do think that the business of staging stands to increase as the real estate market continues to slow, but it's definitely not a cure for a house that is just plain overpriced. Incidentally, my wife recently completed the Residential (Interior) Design program at the Art Institute. Maybe she should start her own staging business.

(Lisa Pemberton, The Olympian, 10.22.2006)

16 comments:

Lake Hills Renter said...

There is no substitute to lowering the price. I wonder if it would have sold if they took the cost of the staging and cut that from the list price.

redmondjp said...

Wow. A $100,900 increase in asking price in one year. In Olympia.

Good luck with that!

Kaleetan said...
This comment has been removed by a blog administrator.
redmondjp said...

Whoops! (New math strikes again)

It's only $90,900 more than a year ago.

wreckingbull said...
This comment has been removed by a blog administrator.
wreckingbull said...

My own, streamlined, 'Staging Checklist':

1. Face wall.

2. Repeat: My home is not a lottery ticket 10 times.

3. Goto step #2.

john_law_the_II said...

" The most recent (September) MLS statistics for Thurston County show residential listings up 95% from last year, sales down 17%, and a median sold price up just 2.4% since they purchased the home—essentially stagnant since hitting $250,000 in February."

sounds like the bubble has popped.

PugetHouse said...

There is no substitute to lowering the price

Bingo. You need traffic to sell a house and get it if your house is priced somewhat agressively for the market.

I have one anecdote on staging. My buyers saw a very well-staged house in Redmond last year April. It was much in need of updating, but looked so darned comfy. My clients had a visceral reaction upon touring this pretty-OK house. I had to talk them out of the bidding war. The house sold for $90k above asking, about $70k above what I had determined to be the maximum reasonable price.

The secret seemed to be in the utter homeliness of it. The table was not set for a dinner party. It looked as if the owners spent every day loving the simple life, and had just stepped out. Maybe your favorite uncle had a house like this.

This setup happened to do a superb job of inducing an almost rabid sense of competition in the horde of Spring '05 buyers. Such a fine touch also impresses the current sparse buyers, sans escalator clauses.

PugetHouse said...

Caffeine defficiency: that was last April, with hordes of Spring '06 buyers.

I haven't even been in PNW since Spring '05. I promise to get right back on my medication.

synthetik said...

kaleetan, thank you for that meaningless and off topic post.

Regarding home staging, what these people really need to do is bury a statue of St. Joseph in their front yards...

David Losh said...

I like this site!!
Staging is one of the things that drives me crazy, but it works.
True story is that I have been making houses white on white with beige carpet forever. I'm a rehabber as opposed to a flipper, but that's a discussion for another time.
I paid a low life loser scum fourteen thousand dollars for paint and a trim package in my last project. The stager was another two thousand dollars. I was sweating the expense and wanted out of the property before last May. I had reduced the price until it hurt. Fact is the new set of buyers coming through loved the color, loved the mouldings, and loved the artsy touches the home had to offer.
I got an extra twenty six thousand out of the effort while the house was off the market for two months.
I've started my next project with a trip to Restoration Hardware and saw two of my competitors there placing orders.

Terry said...

I think staging properties for sale may be the wrong course of action. I read posts on "The Housing Bubble Blog" about how sellers in California had been offering freshly baked cupcakes to potential buyers. I think that's the way to go. I cannot think of a more tempting / convincing incentive.

seattle_slow said...

Yeah, Yeah! Cupcakes rock!

redmondjp said...

Yeah, Yeah! Cupcakes rock!

Uh huh huh huh . . huh huh huh

No, Beavis, you fartknocker, cupcakes rule!

Seriously, though. Why stage? Because it works. Same reason used car dealers get their cars detailed (even under the hood, pressure washing and then spraying that waxy armorall-type stuff on everything). We may all laugh, but looks do matter. Some people don't have the ability to imagine what a room might look like with new paint, furniture, or whatever--staging draws that mental picture for them.

Kaleetan said...

"kaleetan, thank you for that meaningless and off topic post."

My apologies Chad/Tim. I will try to stay on topic.

Foreclosures are important and I hope that Tim will pick this topic up in further detail in the future.

Eleua said...

All of these staging strategies, cupcakes, etc. have been at work in the Dallas market for years.

Eventually, you get to the point where every home is staged, with fresh baked bread in the oven, Yankee candles burning, soft music playing in the background, blah, blah, blah...

Nothing sells like price. However, you do need to get some emotional reaction when the potential buyer first lays eyes on the house.

Not everyone can see past the fairy dust you have sprinkled around the house.

In the suburban Dallas area, there is a company called Mansion Minders. Their job is to put a family into a big, vacant house, and make it look like someone lives there. They get nice furniture, and tenants that will take care of the place.

The tenants live there VERY CHEAP, pay the utilities, and keep the place "show ready" - but have to vacate at a moment's notice if a sale goes through. Think of it as "a living stage."

The trick, if you are the tentant, it to find a very expensive house that is WAY overpriced. You get to live like a king, on a bum's budget, and the house rarely shows, and will not likely sell.

Coming to a rainy city near you...