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Sellers Still Not Budging

stubbornI was sitting at my local Italian restaurant last night and speaking with an acquaintance whom had just signed a listing agreement on his home (not with me unfortunately). The first question out of his mouth was “So how’s the market?”.  After some back and forth lightweight banter, we began to analyze the whole housing crisis (as people so often do while sitting at the bar). I asked how much his home was listed for, and his response was that he hadn’t yet decided on a price. 

Since I am very familiar with his neighborhood and the pricing of the homes within it, we started talking about some of the homes that had sold recently and how they’ve come down in price so much.  I then asked him where he was planning to move when his home sold, and his response was “I’m not sure yet, it depends on where I decide to work, and if my home sells.  I’m in no hurry so I have time to wait it out”.

Therein lies the problem in my opinion…  Sellers who have little motivation to sell and who end up pricing their homes for what they WANT, not what they are WORTH.  We talked about this distinction at length, and he agreed that he’s not entirely motivated but wanted to test the market.

Market Times Increase By 52%

I decided to pull up some statistics for my town of Woodinville, WA and discovered that for homes sold within the last 6 months over $500,000 (excluding short sales) the average market time was 113 days. Compare this number to the average market time for homes still on the market at 172 days and you get a 52% increase.  While there can be many interpretations as to why the market times have increased, I still believe that the main reason for the continuing market slump is that sellers are pricing their homes at what they WANT (or NEED) instead of what they are WORTH.  It is only when sellers become desperate that they make drastic reductions to their pricing.

Pricing a home is as much an art as it is statistical analysis.  Every home is unique and deserves consideration and understanding of its specific features in order to be priced appropriately.  Good agents know this and are able to present concise and logical arguments to their clients along with a timeline for price reductions based on the number of showings, competition and/or market changes.  Sellers that understand these facts and work with their agent to implement timely price reductions are the ones who end up selling.  Those who ignore the facts, and don’t take the advice of their agent will end up frustrated and stay on the market longer than necessary.

What are your thoughts? Let me know…

When REALiTY BiTES, bite back!

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