On this blog, and in my April Current Market Conditions report, I wrote that business started to pick up in mid-March, after a molasses-slow January and February. Some sellers, it seems, gave grabbed on to this tidbit to convince themselves that the market is charging ahead, and returning to its pre-downturn go-go levels. In the past few weeks, more than one listing agent has said that they’ve had conversations with sellers about reducing their asking price to a more realistic level, only to be met by resistance backed up by a reference to "David Knudsen on his blog says that the market is picking up."
I feel a need to clarify my remarks. Yes, there is definitely more activity than a couple of months ago. But there is a significant difference between buyers today versus a year or two ago. Buyers today are VERY value focussed. That doesn’t mean that they’re all lower end bargain shoppers, but no matter what they’re looking to spend, they want to be very confident in the value. The houses that are seeing action are those that have been put on the market at a very attractive price, or have had a major price reduction to bring them into a price space where buyers say, "Wow, this is a great value." Baby-step price reductions, say from $399,000 to $389,000 or from $265,000 to $259,000, just don’t have that affect.
Sellers need to take a very competitive stance, not versus buyers but rather versus the other houses on the market competing for the same buyers. Sellers (well, those who want to actually sell their houses) should sit down with their agent and be open to a ‘tough love’ talk. Review the houses similar to yours that have actually sold, and ask your agent why those houses sold and yours didn’t. What houses are your direct competition on the market, and what can you do to beat those houses to get a buyer? You might not like what you’re going to hear, but you gotta hear it. If your agent can’t give you a really good explanation of your position on the market, and what it will take to get your house sold, maybe you should start looking for another agent. Getting a general answer that "The market’s slow" isn’t an explanation. Have any other houses similar to yours sold? At what price? The market may be slow to dead for your house at your current asking price, but the variable may be "your asking price", if other houses similar to yours have sold for 25% less.