I'm reading that the bid-ask gap between buyers and sellers is slowly narrowing, which is certainly what needs to happen in order for real estate markets nationwide, and here in Philly too, to get back to a state of normalcy. While the bid-ask gap is usually portrayed as a two-sided disconnect between buyers and sellers, from my perspective it seems like the sellers are the ones who are eventually going to have to make the biggest concessions in order for us to start on the long road to a true recovery.
Everything in the markets is working against asset prices, and even long term trends don't indicate that prices will rebound quickly once we reach bottom. The fact that the government is trying it's best to help us avoid pain now really just means that the pain is being spread over a longer time horizon and across more sectors of the economy. In addition, the risk that has always been present in the markets is more visible and freshly-felt now than ever and buyers are accordingly very averse to jumping into anything that isn't a great deal.
So, for what it's worth, my recommendations to all sellers of real estate out there right now:
1. If you don't have to sell right now, don't. Those of you who aren't motivated are merely clogging up the markets and distracting willing and able buyers from the real deals.
2. If you do have to sell right now, recognize that the price you get for your asset is going to reflect the worst economy in three-quarters of a century, highly risk-averse buyers looking for returns that justify that risk, and a very uncertain future that means you can't price any value of future development or appreciation into your property. Price your property accordingly, sell it quickly, and take the painful hit now so we can all start moving forward.
James
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