After more than a decade, as a Real Estate Licensed Salesperson, in the State of New York, I have observed, and listened to, many potential buyers and sellers, who seemed to believe, they had the knowledge and expertise to market – time, the real estate market, and, if buying, purchase at the lower – end, while, if selling, do so, at or near, the height of the real estate market. Just as, in nearly every other financial market, doing so, is nearly impossible, and, often, quite risky. We often witness market fluctuations, and this article will attempt to briefly examine, and consider, some of the relevant considerations, and aspects, involved.
1. This past year or so: In the past year, or so, we’ve witnessed, the price of real estate, in many markets, escalate, exponentially, in a short – period of time. For example, one of the houses, I listed, and represented, not only sold, at nearly 15% over asking price, but there were 22 qualified offers, by the end of the first weekend. We all remember, that, often, in the years before, having to re – price, and adjust listing prices, to get a house sold. Up – markets, often, arise, because of a confluence of factors, such as supply, and demand, low mortgage rates, and the perceptions of improving overall economic and employment conditions. However, prices rose, so quickly, now that mortgage rates have risen slightly, and more houses are listed, we are now, in a somewhat, normal, real estate market. Those who were represented by knowledgable real estate agents, were prepared for the eventualities, and, avoided the danger, of pricing a house, too high. In normal, or weaker markets (e.g. buyer markets), home sellers get the best results, when they price, their houses, properly, from the start!
2. Knowing and understanding the different types of real estate markets: There are three, basic types, of real estate markets: (1) sellers; (2) buyers; and; (3) normal. A sellers’ market is when there are more buyers than sellers, a buyers market is when there are considerably more houses, available, than sellers, and a normal market is when, conditions are somewhat, in – between. Low mortgage interest rates, and optimistic perceptions (regarding the overall economy), often introduce higher prices, and a sellers’ market. When the market becomes over – heated, and prices rise, too quickly, eventually, it cools and dampens enthusiasm, and brings forth a different mindset, and set of conditions. Of course, there’s often, many gradations, in – between.
3. Potential dangers: Buyers who believe, they know – it – all, often offer too low, offers, which not only are refused, but the seller, often considers the offer, insulting, and won’t negotiate. Greedy home sellers, often, over – price their houses, and lose their opportunities of selling their homes.
The best way to consider pricing, is to evaluate the comparative market conditions, and either, price a house, to sell, and/ or, know what you seek, and offer an appropriate price, based on your financial capabilities and abilities, and what’s best for you! The wisest approach is to avoid gimmicks, and/ or simplistic rules and pursuits.