Time to take a cut in price?

The US housing market is in dire straights, no one could argue with that. House prices are down, house sales are down and developers are cutting prices on new developments left, right and center. But where does that leave the homeowner who needs to sell, whether from financial difficulties or some other reason?

There are only two options here:

1. Accept the fact that you are not going to sell and wait.
2. Drop the price to sell now. There's a good reason why developers are reducing prices country-wide. It's cheaper to take a 10 % hit today than hang on to the property for 1/2/3 years in an uncertain market. And who knows where the slide will end, prices could be even lower next year.

Our advice is get out while the getting's good. Take a look at the local property market and ask yourself two crucial questions. "How many properties similar to my own in price and specifications are for sale and how long are they taking to sell?" If the answer is "a lot" and "10 months or more," financially speaking, taking a sizable drop in the price may well be cheaper in the long run than maintaining the house for that period of time. Take into account all running costs,, mortgage charges, property taxes and see which is the cheaper alternative. A year of costs or taking that much off the sale price and moving on.

It's all to easy to get hung up on how much money you "should have made." The market today is not what it was s little as a year ago.

There is a range of good advice and numbers here:

Don't Blame Market for Housing Bubble (old but good) (house.gov)
Ron Paul Gives Fed's Ben Bernanke a Schooling on Inflation (bullnotbull.com)
Leverage becomes enemy when prices fall (idahostatesman.com)
Calif. house prices 37% ahead of U.S. loan limits (lansner.freedomblogging.com)
Oppose the San Mateo County Foreclosure Moratorium! (patrick.net)
Seattle prices down again -- it is NOT time to buy! (seattlepi.nwsource.com)
Condo Fee Defaults Surge in Manhattan (nysun.com)
Price drops $1000 every day! (fortlauderdale.craigslist.org)
Most Affordable Places to Live Well (finance.yahoo.com)
Bankruptcy Law Backfires on Banks (bloomberg.com)
Toll Brothers sales sharply lower in early financial report (money.cnn.com)
Shareholder Sues Citigroup Execs Over Subprime (efinancedirectory.com)
Affirmative Action for Morons (pacificariptide.com)
Houseowners Feel the Pinch of Lost Equity (nytimes.com)
Credit Card Debt a $915 Billion Disaster-in-Waiting (newsmax.com)
HSBC Ends Sales of Mortgage-Backed Securities in U.S. (bloomberg.com)
Houses Left Vacant in Slump Mar Neighborhoods (npr.org)
Downside risks from financial shocks will persist (PDF - patrick.net)