Tuesday, February 12, 2008
Why do so called real estate "professionals" have such a hard time pricing a home. 98% of the homes on the market are overpriced. How do I know, because they are not selling. If they were priced correctly they would sell!
The market is declining. Only an idiot would dispute that fact today. Nearly every economist worth a damn is predicting California prices to continue falling into 2009. The IE is in especially bad shape as is the central valley. We are likely to see prices decline 50% to 65% from peak according to some of the more bearish economists. So far prices in the IE are down nearly 30% from peak prices.
So, once again I ask "why do real estate professionals not price homes correctly?"
We are in a declining market. The riverside median price is dropping at roughly 4% per MONTH. If a comp that is 3 months old is used to set a price, that price is already 12% too high when it hits the market. What should be done is to take a recent comp and price the home 10% to 20% below that. If the house is "below market" it will get multiple offers. If it does not get any offers then it is still too high. Drop the price 5% per month until you get an offer. DO NOT CHASE THE MARKET DOWN. It's a race, get ahead of the declining market and it will sell.
I have seen a few (very few) homes that came onto the market well below the other homes in their area. Guess what? THEY SOLD! All of them sold for above asking.
Here's a tip for any realtors that might read this. PRICE THE HOME WELL BELOW THE COMPS! It's not like the home is going to sell for 50% below market. If it is indeed priced below current market it will get offers above asking. It's like every realtor in SoCal has forgotten how to SELL a house. It's the price stupid!
This applies to delusional sellers too. Pull your heads out of your butts long enough to get a whiff of reality. Price your home below recent comps!