The evidence is in the growing number of days it takes to get an offer and in the number of price reductions that we are seeing with increasing frequency. It’s also reflected in the multiple open houses we’re seeing without generating any offers.
Sellers might look at one or two houses that are on the market before putting their own house up for sale. Buyers tend to see just about everything available in the neighborhood and know exactly which houses are priced well and which aren’t.
Which brings us to “priced well”. What is that? It actually means priced appropriately for the condition and the market. Sellers who sell potential — potential family room in an unfinished basement or bedrooms in an as-yet-unfinished attic — aren’t being realistic when they put a price on the house as if those things have been completed.
Regardless of the age of the house, what brings the highest price? A well thought-out and updated kitchen. Additional living space. Evidence of ongoing maintenance.
This is one area where size really does matter. All things being equal, a larger house will command a higher price than a smaller one. Unfortunately, in most older neighborhoods, all things are seldom equal. The pricing difficulty comes when you have a really nicely updated and maintained small house and a larger house that has lots of what we call “deferred maintenance”. The smaller one may actually sell for more.
Sellers have to remember that the price they see on other houses for sale are likely to be the “I hope I can get this much” price. At the end of the day, reality is the price that the seller actually accepts, minus any closing help and repairs that are negotiated.
And most sellers think we’re still in the same market we were in six months ago.
And we just aren’t.
(C) 2006 Susan Pruden.