When It Comes To Pricing A Home, Don't "Test" The Market
In this declining market, real estate agents have been advising home sellers not to "test" the market at a high price thinking they can bring the price down if they don't get any offers. Real estate agents have known for years that if you overprice a property at the beginning, it will languish for months and will ultimately sell for less than its true market value.
Now, there's more evidence validating the proof of this theory.
Philadelphia Daily News reporter Lynn Kathleen wrote on November 2nd about a New Jersey property appraiser who tracked the sales history of 4,500 homes in the fist six months of 2007. Just like the Tampa Bay area, much of New Jersey is faced with a declining real estate market and prices are adjusting downward.
The New Jersey study tracked sales of homes priced from $500,000 to about $700,000. Of homes that sold within one month of listing, the median asking price was $599,900 and the median sales price was $599,000. That's pretty darn close.
Of homes that were on the market for more than a month, the median asking price was $634,900, but the median selling price was only $585,000. Quite a disparity.
The study indicates that higher prices immediately turn off many buyers. In markets where prices are falling, these overpriced homes become even more overpriced with the passage of time. The longer these overpriced houses are on the market, the lower the median prices will become and eventually they will be sold for even less money as market values continue to soften.
Simply stated: In a declining market, an overpriced home becomes even more overpriced and harder to sell with the passage of time.
On the other hand, if homes are initially priced properly for the market -- or even a bit under market value -- it seems to attract immediate buyer attention. The study indicates that proper pricing assures buyers that they do not have to fear the continued fall of median prices since they did not overpay for the house. Thus properly priced houses sell faster and for more money.
"Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market," according to the report which was prepared by Jeffrey Otteau, New Jersey-based appraiser and head of Otteau Valuation Group, Inc.
For more information on real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
Now, there's more evidence validating the proof of this theory.
Philadelphia Daily News reporter Lynn Kathleen wrote on November 2nd about a New Jersey property appraiser who tracked the sales history of 4,500 homes in the fist six months of 2007. Just like the Tampa Bay area, much of New Jersey is faced with a declining real estate market and prices are adjusting downward.
The New Jersey study tracked sales of homes priced from $500,000 to about $700,000. Of homes that sold within one month of listing, the median asking price was $599,900 and the median sales price was $599,000. That's pretty darn close.
Of homes that were on the market for more than a month, the median asking price was $634,900, but the median selling price was only $585,000. Quite a disparity.
The study indicates that higher prices immediately turn off many buyers. In markets where prices are falling, these overpriced homes become even more overpriced with the passage of time. The longer these overpriced houses are on the market, the lower the median prices will become and eventually they will be sold for even less money as market values continue to soften.
Simply stated: In a declining market, an overpriced home becomes even more overpriced and harder to sell with the passage of time.
On the other hand, if homes are initially priced properly for the market -- or even a bit under market value -- it seems to attract immediate buyer attention. The study indicates that proper pricing assures buyers that they do not have to fear the continued fall of median prices since they did not overpay for the house. Thus properly priced houses sell faster and for more money.
"Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market," according to the report which was prepared by Jeffrey Otteau, New Jersey-based appraiser and head of Otteau Valuation Group, Inc.
For more information on real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 5:12 AM
0 Comments:
Post a Comment
<< Home