The Real Estate Market in the past several years has lulled us into a comfortable state of complacency.
We REALTORS could pretty much have our way (and let our home Sellers have THEIR way) when it came to pricing homes . . . It was pretty easy . . . Do a cursory Comparative Market Analysis mostly because that’s what we’re s’posed to do so as to be able “justify our price to the market” in the event some pesky Buyers and their agents dared challenge it with the question: “Where did you get THAT price?”
Home sale values were climbing quickly enough that we could pull 3 months of “Historical” (CLOSED) data and identify the highest Price/Square Foot number and increase that by 3-5% and let that be the price. We could then sit back and collect multiple offers, many of which were higher than the already lofty listing price.
NaySaying Pundits would make noise to the tune of: “WELL! You might have it under contract at that price, but it’ll NEVER appraise for that!”
These pundits were, more often than not, proven to be wrong because . . . In the time between that initial CMA was created and the time when the appraiser showed up, there was a whole new set of “Comparable Properties” closed with enough data to justify the higher price.
Yes! Values WERE rising that quickly!
Things are achangin’!
This isn’t doom and gloom. It just is what it is. The real estate market in settling down. There are fewer multiple offer scenarios, more houses lingering on the market, Sellers having to reduce their prices, and Buyers able to negotiate for more favorable terms.
Some alarmists will squawk that the sky is falling because the NUMBER of sales has declined along with the rate of increasing values . . . No worries! That’s to be expected! It had to happen! What goes up must come down! Fact is, those years of madness were a market indicative of “Hyper-Drive” that is not duplicatable. This was a market that was pure octane infused Adrenalin high of epic proportions and scope. This was NOT a “Healthy” market, nor was it sane.
Don’t worry about the past!
Pay attention now to what the market is doing here and NOW.
There’s no need for alarm . . . House values are not plummeting. In most areas, they continue to rise . . . just not as rapidly as before.
The old CMA formula no longer “works” . . . It leads to overpricing the house and then “chasing the market down (by reducing the price)” until it finally sells at a price the seller would have received had he priced it right from the beginning.
We still look at the comparable, Historic Data with caution.
We pay more attention to the houses that are currently ON the market – The REAL Marketplace.
We compare the house we intend to sell to THOSE houses . . . our competition . . . and we build a pricing strategy that yields as many of the Sellers’ terms and conditions at the highest price possible
It occurs to me that there are many REALTORS in the marketplace who have never experienced anything other than a frenetic market. My advice to you? Hang with some of the “elders” in your office and get them telling stories about all the myriad market shifts they’ve endured . . . and how they survived when someone moved their cheese.
If you’re thinking about making a move, 2019 is a great year to do so (IMHO). As the Spring inventory builds, I think most Buyers will be pleased with their choices available . . . and most reasonable Sellers can and will sell within their time frame at a fair price.
I’d be remiss if I didn’t close with this this shameless plug for The Vital Few REALTORS of Pareto Realty.
I and the whole team are quintessentially prepared to protect and serve you throughout the process throughout Middle TN.
PS: If you are a REALTOR interested in “upping your game” in 2019 and not tickled pink with your current firm, Pareto Realty is growing – Connect with me directly, and let’s discover if we’re a good fit.