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“Dry Your Eyes and Lower the Price”

I wish I could take credit for the catchy title to today’s post, but it was actually the headline to a New York Times article last week. It was the story of how sellers are finally accepting the reality of today’s housing market and adjusting their price accordingly. The results prove a point: Today, pricing the home at a compelling price is the key. If you are willing to do that, there are buyers ready to leap to action and purchase the property.

As examples, the article cited the following:

The first thing Mr. Seiden (the real estate agent) did was brandish the tissues and recommend a listing price of $60,000 less. “At first I was in shock,” Mrs. Whiting (the homeowner) said. “But then I decided if we wanted to sell, this is what we better do.” A bidding war ensued, and some weeks later the house went into contract at $10,000 over the list price.

Mr. Nadler cited another Larchmont example: a three-bedroom two-bath prewar condo listed at $1.2 million whose owners “needed to be convinced” to drop the price. After generating only weak interest and unacceptable offers, they finally agreed to lower the price to $999,000 and then to $985,000. At that point, Mr. Nadler said, “the floodgates opened.” It sold for close to the final asking price, he said.

Both of those examples were houses in New York. But the same rule applies throughout the country and with whichever category of residential property is being sold. As proof of that point, I offer you an article published by Housing Wire which reported the success of a condo development in Chicago.

Belgravia Realty Group, a Chicago-based real estate developer, sold 50 condominiums in four weeks after cutting prices by as much as 30% on a 241-unit development in the downtown area, a sign that reducing prices is boosting purchase demand.

“The response has been incredible. There is pent-up demand, and we’re getting traction at these price points,” said Alan Lev, president and CEO of Belgravia. “There’s also a real sense of urgency among buyers looking to take advantage of the Federal Homebuyer Tax Credit and today’s 5-percent interest rates.”

In any market, if something is priced correctly, it will sell. The challenge in today’s housing market is how to establish the correct value on a property.

The reason this is so difficult today is because of the unprecedented appreciation that occurred from 2000 to 2006. Let me show you what I mean:

As we can see, the challenge was created during this run-up in prices. The correction is taking place today.  That correction still has a way to go.  Homeowners that realize this and act accordingly WILL SELL THEIR HOMES.

What does this mean to you?

There definitely is a pent-up buying demand – if the property is priced properly. If you truly want to sell, call your real estate agent today and find out what price would be considered compelling for your house. Please realize this conversation is not an easy one for the real estate agent either. They realize that you have pride in your home and, in some cases, many memories. Let them know you need to know the truth. Once you have the real price, you can make an informed decision as to whether now is the time for your family to move on.


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4 replies
  1. Cookie Cohen
    Cookie Cohen says:

    Steve, Great article and definitely one to share with homeowners…Being part of your program has given me renewed confidence and an edge in dealing with leads..I made a great choice in being a part of your network..Thanks for your insight!! Cookie

    Reply

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