In good markets and bad, the market always knows the price. It always has, it always will.
While the big talk in the local real estate industry continues to talk about “low inventory” and high demand, there are other people out there waiting for the big crash… I wish I had a shiny crystal ball to say exactly what the future holds for us, but I don’t. One thing that I do know is that the market always knows the price.
I have heard people recently say that we are in for a major correction here in Arizona within the next 6 months. One was an agent in California advising some people who are thinking of moving from there to here. Another was a political consultant who most likely has very little experience in tracking the real estate market. In my opinion, they are both wrong.
Other people are also saying that the future looks very bright for real estate in Arizona.
Low supply, high demand, low interest rates, an increasing population. These are some of the current drivers of our local real estate market.
The fact is, many homes are selling VERY quickly in the market today. BUT, there’s always the exception to the rule.
Many, probably all, exceptions to quick home sales have to do with improper pricing. Over-priced homes do not sell. Period.
Let’s look at a great example of a home here in Tempe. It’s a home priced at $1.1 million. Great neighborhood, decent lot, pretty good floorplan. BUT, the home isn’t nearly as updated as recent $million sales in the neighborhood that had larger lots, better landscaping, better updates, etc. A home that is VERY close in size and condition sold just a few months ago for $860k. Gee, I wonder why this home has been on the market for more than four months…
Other things that effect improper pricing will be poor / outdated floorplans, lack of updates, lot size and something we call “functional obsolesence” among other things.
Proper pricing is always the answer, and the market always tells you if you have priced your home incorrectly. It’s important to set realistic expectations, price the home properly and adjust, if needed. There’s not a magic bullet and there’s not an agent in this world who can outsmart proper pricing.
In the vast majority of cases, if your home isn’t selling, it makes sense to lower the price until it sells. Waiting for the market to catch up can be a costly mistake.
People can blame anything they want, but until they blame their price, they will continue to look for answers where they don’t exist.
As a side note, our year-to-date listings (to August of 2020) have sold in an average of just 7 days on the market. That’s 22 listings at more than $6.5 million. The buyer side of our YTD sales is higher at 47 days on the market for a little more than $5 million in sales. The obvious difference here is that we can help in determing our listing prices.
On the flip side of over-pricing, you’ll find people who are determined to “get a deal” in a rapidly appreciating market. They make offers on a home that are far less than asking price because “no one pays full price” for a home. Sometimes, it takes them a few times, maybe a few moths, before they realize that the market has just gone up even more. As the market rises, the home they thought they could “steal” at $450k is now going to cost them $475k. What a deal, right?
The market always knows…
Something to remember:
When selling a home, it’s important to take into consideration things like location, features, condition, etc. The fact that you installed a new ceiling fan will not help nearly as much as new flooring. Clean is important, updated flooring, the condition of the roof, the condition of the paint and landscaping, etc. In a hot market and in a super competitive price range, some things are less important than others. But, if the lot is funky, the floorplan is bad, the carport has been converted to living space or the price is higher than what the market will bear, the market always knows… It pays to pay attention to what it is saying.
As always, we’re happy to help!