Seller Patience or Radical Price Surgery – Your Choice
All real estate is local. When observing the trends and data for the Phoenix Metro real estate market, we often use all parts of the metro area (macro) and all types of housing, including single family detached (SFD), condos, mobile homes etc, though SFD is the great majority of all types.
When determining the value of a specific property, we use the “micro” approach where we pull comparable sales from the immediate neighborhood and usually up to a mile away – the same parameters most often used by appraisers.
When determining trends, we are usually safe to use the “macro” approach, because quite often the vast majority of homes fall into the similar trend of the greater. When we start to analyze the more narrow parts of the market however, we throw just about everything out the window.
We can therefore say that overall the Phoenix sales market is improving for sellers. Sales are increasing, market time is decreasing, pending sales have been increasing, and the sales price per SqFt is increasing again.
But all real estate is local. The Northeast Valley sales market in the luxury division (Over $1 Million) is far different than the under $500K market in the rest of the valley. In the NE Valley luxury market (16 zip codes) which includes Scottsdale, Paradise Valley, Carefree, Cave Creek, Fountain Hills and a few Phoenix zips, the market time required to sell a home, with one exception, are all over 300 days, and many of these zip codes require between 680 and 1100 days to sell. The market temperature description that comes to mind is ‘frigid.’
On the other hand, at the lower part of the pricing market, such as under $200,000, the market time for a number of communities is less than one month. These communities are ‘smokin’ hot. Here, sellers need to be careful not to list their homes too cheaply – they could leave money on the table.
But what if you have a pricey luxury home that needs to get sold now, (within 30-60 days) what can you do to sell that home? That’s a great question and unfortunately, there’s no guarantee it can be sold quicker unless you perform radical surgery dealing with the listing price.
In truth, a “radically” reduced price may “appear” like you’re giving away the home when in fact it may end up to be the “Fair Market Value” of the home because the great majority of the other homes for sale are significantly overpriced.
Remember, the market tells us our values. You MUST lead the market to show that your home is one of the neighborhood’s best values. To do that you must talk to your Realtor straight out and say, “Mike, you’re telling me the market time in my community is 600+ days? I don’t want to be listed in 600+ days. What is the price I need to set the house at to sell it within 30 – 60 days???
If you’ve never seen a Realtor GULP before, you will now after asking that question. Then get two other professional opinions asking the same question.
– Mike Bodeen