Reuters Money

Two words of advice for the majority of U.S. home sellers: Get real. In most places, the market won’t come back for a long time, if ever. American housing in the worst markets is a damaged good that may remain so for a generation.

There are exceptions, of course. You can expect to see a sales and price bounceback in a handful of places that combine robust job growth with favorable supply-and-demand numbers.

According to the Local Market Monitor,which tracks real estate trends, there’s been strong job growth in Bethesda, Dallas, Raleigh, Washington, Milwaukee, San Jose and Houston. Most of these cities weren’t hit particularly hard by the bubble.

Job growth typically translates into stronger home prices. The publication forecasts a two percent to four percent housing-price increase in Bethesda, for example.

Places where the bubble burst most catastrophically are a different story. I was recently in Florida, where a land surveyor (now hiking cars for a rental agency), said the only sales he knew of were cash transactions from foreign buyers. One sale I tracked was a two-bedroom condo that sold for $89,000 that was valued around $200,000 five years ago in the Ft. Myers area.

In every market, supply and demand rules the day. Don’t expect glutted markets like Florida — where some 20 percent of homes are vacant — to see a quick recovery. The Market Monitor’s Ingo Winzer forecasts that home prices may drop another eight percent over the next two years in the Sunshine State.

With the exception of Washington, D.C., which seems to be benefiting from strong hiring (including the Bethesda, Maryland market), most major metropolitan areas are sagging.

According to the most recent S&P Case-Shiller housing index report, 19 of the largest 20 markets fell in January. The prospect of a double-dip housing decline seems likely. Prices in Atlanta, Cleveland, Detroit and Las Vegas have dipped below their January, 2000 levels.

If you’re trying to sell in a declining market, that means you will have to re-adjust your thinking and forget about bubble-based values. You may have to price your home along the lines of what it was worth in the last century.

Here are some tips to keep in mind that will help you get real:

• What is the shape of your local market? Forget about national real-estate trends and low mortgage rates. You need to know how many homes are for sale in your area. What is the competition?
• How many foreclosures are on the market? This is your competition as well. If you are selling against similar bank-owned properties, you have to adjust your pricing accordingly.
• How long do homes remain on the market? If homes sit unsold for months (or years), that tells you something. The main factor moving homes now is price. If your price is too high, you won’t attract any buyers.
• Get three different pricing estimates. Real-estate agents need to be realistic as well. Get three comparative marketing analyses and ask each agent to figure a “fire sale” price that will get buyers in the door.
• Get your house in shape. Clean up your property, put on a coat of paint where needed and spruce up kitchens and bathrooms. Hire a “house stager” who can make your home’s interior look larger and more desirable. Check out Ilyce Glink’s new book “Buy, Close, Move In” for more tips.

Aside from the government reviving its successful tax credit for new home buyers, only favorable economic winds will revive the home market. In the interim, you’ll need to check your ego at the door if you need to sell now.

John Wasik will be talking about the housing market in a Nightly Business Report commentary on April 5. Check your local PBS station for air times.