Right now in mid-May, there’s a HUGE amount of properties that are NOT sold and are really struggling.
For certain cluttered price ranges right now, it’s a battle to get a buyer. My wife showed eight detached homes two weeks ago, and as of today, seven of them are STILL for sale.
So let’s talk about how to price properties during a market shift RIGHT NOW.
We’ve seen a handful of market shifts in the last 20 years of being very active Realtors… and it’s the most challenging time when things are “unsettled”, like right now.
So what are we saying to our clients?
Well, right now you have three choices when listing your home.
You can be:
(1) ON the market, or
(2) IN the market, or
(3) AHEAD of the market
If you are just “on the market”, you are likely not selling right now. Sellers in this category also think their agent is the worst agent in the world. 🙂
Usually that means they’re pricing based on history, not on today.
“In the market” means you’re competing against others out there. That’s fine if your competition is low, but when there are LOTS of options for buyers, you’re also dead in this category.
“Ahead of the market” means you’re aiming to be the next home that sells. If you have five competitors listed between $950,000 to $1 million, the idea with pricing “ahead” is that you’ll be in the $900,000 to $925,000 range. Sometimes this even leads to a situation where you get more than one buyer interested.
Because the reality is… if there’s a cluster of homes that are all not selling, it won’t be long before at LEAST one of them reduces their price. So get “ahead” of them.
We have a condo at 1450 Main #304 that’s for sale right now. Nice building, good floor plan, and well-presented.
We started at $795,000, and the market started dropping. One of our competitors sold for $50,000 less. We went from being “in” to being “on” very quickly.
So we reduced our price to $750,000, and then we had 5-6 new competitors pop up in the mid-$700’s within a few days.
We held on, but eventually got ahead of them by changing our price to $720,000. A strong offer came within ONE day, while the competition sat waiting.
If it wasn’t us, it was going to be someone else, because the showings were slow. In fact, we had LESS showings when we were at $750k compared to $795k. THAT is a sign of a market change.
So please take the advice to heart.
“In” the market can work when you don’t have a lot of competition, but the ones that are getting the job done right now are almost always “ahead” of the market.
Sometimes you’ve got to sacrifice the toes so that you don’t lose the foot later on. Selling for $20,000 less than the competition now might mean you don’t have to sell for $50,000 less in a month.
This is all about not chasing the market on the way down, and getting sold sooner rather than later. Particularly if prices are trending lower and competition is trending higher.
Sounds a little rough, but it’s true for certain homes right now. Save the foot!
While you might sell for a little less than you wanted, your competition will likely be fighting even harder for a buyer, and there’s a good chance they’ll sell for even less than yours. In a flat or a declining market, speed to sale matters a lot.