Ask a Realtor: Why so many price drops in a great selling market?
Ask a Realtor
Dear Joan: I consider myself a self-proclaimed “real estate market student.” I own a small condo and have aspirations of selling it and using the money I gain to buy a larger home. Therefore, I am working hard to sell near the “peak” of the market. I have been told that this is impossible to predict and so that is not my question for you
What I am trying to understand is how come we often see price reductions, in what looks like a good to great market to sell
Dear Student: You have hit upon the nemesis of sellers and brokers … accurate pricing. Just for background, our MLS shows that in the last seven days, we have had 33 new listings, five price increases, 50 homes go under contract, 20 sold and 28 price decreases. This small snapshot shows that we have an active market, and are definitely headed toward low inventory, which then begs the question you asked .. why are there so many price reductions?
The first and most obvious answer is that someone priced it too high for the market to begin with. This may be the broker, but is most often the seller attempting to get more money than the current market will allow. Our market is strong, but buyers are not fools. Buyers now have access to so much information on the internet, they can often see just by the pictures that the home does not warrant the asking price. Sellers still think that someone could make an offer, even if the home is priced too high.
However, the chances are the buyers won’t even see it if they are doing a computer search in a lower (more realistic) price range for that particular type of home. Besides this “unrealistically hopeful,” obvious reason for overpricing, there can and are, many other reasons. The sellers may suddenly become more motivated for a wide variety of personal reasons. Or, the sellers/broker may feel it is a strategy to draw attention to their property by making frequent small price adjustments.
Once in a while we run across a situation where one owner may want to sell but one owner really doesn’t want to sell, and therefore they may do a small reduction, but the property still remains well above market value. My advice to you is to find a trusted, knowledgeable Realtor and have them help you analyze the market and your situation. This might be the perfect time for you to maximize your investment in this low inventory, still great interest rates,
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years. Contact Harned with your real estate questions at firstname.lastname@example.org, 970-337-7777 or http://www.skiandteehomes.com.