Wednesday, May 18, 2011

Home pricing and selling not based on supply and demand alone

When discussing home pricing recently for one of our listings, a good point was brought up about supply and demand. Let's see if I can write this to make some sense:

Although we could price a house in a certain manner where there were few similarly priced homes with similar features (most houses are priced higher and inventory generally low for a subject house), this may not dictate that the house would sell close to that listing price. That is, it would get showings due to lack of quality house inventory, but possibly lack features that would elicit a strong offer and sale.

The features of the home and expectation of the buyers at any given time in a local market will determine price and sale of a house. It's a moving target. However, we are with buyers and sellers every day observing the very homes that sell. We gather data from those experiences that will help predict what features and price will sell houses now.

Bottom line: Even if you're the only game in town today's savvy buyers are still going to wait for what they expect and purchase greatly based on expectation rather than inventory.

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