With the steady incline in home prices, we are starting to experience the ramifications of home sellers overpricing their homes and then waiting too long to make the proper adjustments. When our market started to rebound and properties in the Rogue Valley were selling at top dollar, it didn’t take long for homeowners to become home sellers, sprucing up their places and hitting the market. After-all, “If my neighbor can sell for that, my house HAS to be worth at least $20k more.”
For some time, this theory worked and we saw Seller after Seller getting top dollar. They were finally in a positive equity position which was so welcomed after the downturn the real estate market had just experienced. With each astounding sales price, a few more neighboring homes came on the market and quickly sold. A number of them suffered during the appraisal process, given much of the sales data hadn’t yet caught up to the buyer demand, but little by little we saw an overall improvement in justifiable value and our market quickly shifted into a true “Seller’s Market.”
As we enter the Fall and Winter, we are starting to notice the days of market for many homes is increasing as compared to the months past. We are seeing the months of supply rise and in some price ranges there are now dozens of homes to choose from vs. only the select handful we saw a short time ago.
With few exceptions, we would venture to say if your home is listed and its days on market exceed 90, you might be priced too high. It doesn’t mean your home isn’t “worth it” and you could certainly hold out for the perfect someone to come along but if you are serious about selling it, you may want to re-position it. By waiting, and simultaneously accumulating more days on the market, statistically you’ll get less in the long run so why not trim some of the fat proactively and open it up to a new pool of buyers.
Knowledge is power and with pretty much anything and everything you ever wanted to know about real estate posted on the internet, Buyers are equipped with a lot of information. We have seen spreadsheets of data accompanying our buying clients; including sales history, pricing trends, days on market and the list goes on. Many are keeping track of the property history not just for the current listing but every time that particular home has been offered for sale in the past. They are googling the Sellers, checking out their work history, family situation, marital status, Facebook page etc. It’s a little bizarre but important and certainly worth mentioning because it is impacting sales.
Don’t get us wrong, we have certainly lived through times when a Seller could ask whatever they wanted and they would get it. Time and time again. They justified it by deciding the value of their “blue sky” made it worth it. We all know the painful result of that line of thinking and the havoc is wreaked on the mortgage industry. Now, post lending crisis, we have suffered through the much needed checks and balances involving appraisals and while it hasn’t been fun it was needed and certainly warranted.
We certainly don’t have bucket loads of inventory but the numbers are increasing so while it’s tempting to hold out for absolute top dollar in today’s market, if your home isn’t selling you need to pay close attention to your pricing strategy. It’s not just the brokers who are focused on value; Buyers know what makes good sense and what doesn’t, they have seen enough homes to know. Value is an integral part of a healthy market and if Buyers don’t consider your place a decent value, they often won’t even look. Quality materials, bells and whistles do matter but not as much as we would hope and in most cases Buyers aren’t willing to pay a whole lot extra for them.