July 1, 2019
Accurately pricing a home initially to avoid price reductions is the most lucrative strategy.
Initial Pricing: Sellers who price their homes accurately and avoid price reductions sell their homes for more.
After their own personal pre-race ritual, the sprinters approach their designated starting blocks. The starter raises the pistol into the air stating, “On your mark.” The runners carefully place their track spikes onto their blocks. After everybody looks ready, the starter then utters, “Set.” The athletes get in the loaded position and their legs are ready to fire. Finally, the gun goes off and they explode onto the track. Ultimately, somebody does not have a good start. Some delay. Others do not have the proper form. The initial start is crucial and is an advantage that often propels the athlete with the best start across the finish line with arms raised high in the air.
Similarly, when a home initially comes on the market, the price will determine whether or not a seller will be raising their arms in the air with delight as they successfully close escrow. Buyers today do not want to pay much more than the most recent closed sale. Prices are a lot stickier. The days of rapid appreciation are now in the rearview mirror. Overpriced homes sit without success. Throwing a price out there just to test the market is not a wise strategy. Instead, carefully and methodically pricing a home is vital to cashing in on the Golden Opportunity, the first few weeks after coming on the market.
Accurately pricing is critical in obtaining the highest and best sales price. Homes that do not have to reduce ultimately sell for more. The amount of market time increases substantially for those that must reduce. And, there are a lot of price reductions occurring every week right now. An eye-opening 11% of all active listings reduced their asking prices last week.
With all of the fanfare, it is not a coincidence that the initial listing period is extremely important. Cashing in on the excitement makes a lot of sense; however, many sellers do not understand the significance and waste this GOLDEN OPPORTUNITY. Yes, a seller can always reduce the asking price down the road to be more in line with a home’s Fair Market Value, but the reduction will not be met with the same enthusiasm as the initial first few weeks.
The bottom line for sellers: spend more time carefully arriving at the asking price, taking into consideration all the pluses and minuses in the home: condition, upgrades, and location. Having the right price to begin with will not only reduce market time, it will result in more activity and a higher sales price.
Active Inventory: The current active inventory increased by 1% in the past two weeks.
Demand: In the past four weeks, demand dropped significantly by 4%.
Luxury End: The luxury market slowed significantly the past couple of weeks.