Setting The NEW Price
If there’s one constant that I’ve observed over the years in upward and downward shifting markets, it’s that there’s a disconnect between listing prices and actual market conditions. In an “up” market, sellers and brokers pay too close attention to the comps, eventually pushing prices up caused by bidding wars. In a down market, sellers and brokers still pay too much attention to comps, relying on data of months and years past, which doesn’t accurately reflect what’s happening today.
The moral is this: whether you are a buyer or a seller it’s time to accept you must approach the market for what it is today.
Buyers, here’s the good news: Just because an apartment is priced at X, doesn’t mean you can’t have it for 10% (or more) less than that price. I’m encouraging all my buyers to look significantly above their desired price and take a stab at a listing they like. While it won’t work every time – some sellers are still holding onto unrealistic prices – eventually a buyer will align with a seller who is ready to sell and understands the true value of their home. In this instance, the buyer has set the new price for this home and other comps. They win. When others start to follow suit, those listings will move more quickly because they are more appropriately priced, all while this first buyer had their pick of the litter.
If you are a seller, let's be real - the outlook is a little gloomy. Unless you are willing to sit on a home for 6-12 months and take your chances with the needle-in-the-haystack pricing philosophy, swallow your pride, and price your home to sell. The market is still active, buyers still want a well-priced home. Be the seller who ignores the comps of 6 months ago, accepts that those numbers aren’t accurate anymore, and set the new price. You’ll be all the wiser for it and the market will reward you with a quick transaction.
As brokers in the most sophisticated city in the world, we get caught up in the idea that we need to be market makers, but we aren’t. The best agents listen to the market and play by its rules in order to transact effectively. If you are a buyer or a seller, my best advice is for you to do the same.