We continue to see real estate prices depreciating, 3 years into this market cycle. While it’s slowed in many of the areas I work, it’s still happening to a degree. There’s an easy solution. Sellers who aren’t realistic as to their home’s market value need to pull their homes off the market.
In a depreciating market, there is too much supply but not enough demand to match. The demand for homes is still there but the inventory levels are often laughable (after you finish crying). The highest I’ve seen is a 22 month supply. That means that if no more homes came on market, it would take nearly 2 years to sell what we have. By comparison, a 5-6 month supply is stable.
It’s highly unlikely (impossible?) that any home buyer has lived under a rock and doesn’t access real estate technology or data. Are they really going to buy your house for 10% more than the market, if it doesn’t have 10% more in upgrades, space, etc?
The answer is no, and that means the next answer is simple. Don’t sell your home.
If all non-serious and unrealistic sellers would pull their homes off the market, buyers would have much less to choose from. When there is more demand then supply, the market starts appreciating. That helps everyone.
I should note that the real estate community is a large part of this problem. By and large, anxious agents are desperate to make a sale, and I hear stories of them telling sellers whatever they want to hear just so they will hire them (i hear many of those stories as part of my real estate rescue!). Realtors need to be smarter, giving better advice to clients. It’s our fiduciary responsibility.
This week’s episode of HGTV’s “Selling LA” was an example of this, as a young inexperienced agent took a listing that was, by hear & her mother/mentor’s account, $300,000 over priced. It was inventory that had no chance of selling.
Now, if you don’t sell, can’t sell – but need to move, what are your options? Read my “Getting Unstuck” Tips here on the blog for more options.