The hot real estate term right now is ‘Right Pricing’. (No, its not ‘foreclosure’.) There’s been a new construction spec house at Chapin Estate on the market for well over a year, listed first with Chapin Realty and then 3 months ago moved over to Malek Properties. (Click here to see the house.) The asking price for the 4BR, 3 1/2BA, 3,319 sq. ft. house on a 5 acre non-lakefront parcel hovered just under $1 million — between $964,500 and $997,500 — and it just lagged. The house is well built, in a lovely Adirondack lodge style with a good floor plan. The house has been shown quite a bit, but nobody bought it. It just didn’t hit the value proposition right for buyers. Yesterday, the owner dropped the price to $824,900. I sure sat up and noticed. The seller bit the bullet and made the ‘right pricing’ move, and I expect, even in this sluggish market, that the house will have a buyer within the new few weeks.
Then in today’s Sunday New York Times, there was an article in the real estate section on "The Case for Right Pricing". The examples they used were in the NJ suburbs, but I think there is far wider application. I was curious about how the pace of price reductions here in Sullivan County. I looked at the 760 single family houses that have been on the market here longer than 90 days. Of those, 400, or 53%, have had a price reduction from their original listing price. But most of those price reductions have been very modest, less than 10%. Only 196, or 26% of the 760, have had a price reduction of 10% or more. I also wonder what those other 47% of sellers who’ve made no price reductions after 3 months with no sales action are thinking. They must be watching a cable channel I don’t get.
I’ve blogged before about my experience selling my condo in Florida. It was on the market for 18 months, always priced just slightly below similar units. I was always priced better by a few thousand dollars, and my broker kept advising me that was the right positioning. But it wasn’t the right price. My last asking price before I took the plunge was $339,000, and the next closest similar unit was listed at $345,000. I bit the bullet, lowered the price to $299,900, and had a full price deal within a day.
I can’t say that will work for all properties here. But there are plenty of properties with enough appeal features that could benefit from some radical price surgery — and likely capture that coveted "SOLD" sign.