As the housing market starts to heat back up, one of the hardest decisions facing home sellers is how to price their properties.
Traditionally, brokers have set listing prices by reviewing how much comparable homes sold for in a neighborhood. Now, with prices edging lower in many places and the number of homes on the market climbing, checking comparable sales is becoming less useful. At the same time, many would-be buyers are sitting on the sidelines, waiting to see how far prices will fall. Bigger inventories of unsold homes also are making it harder for sellers to figure out how to make their house stand out amid the competition.
For sellers, a seasonal surge in sales means that this is the time to be priced accurately. This does not mean only $15,000 over the probable selling price. This means that the property that are obvious bargains will sell before the end of the season. So make your property an obvious value.
For buyers, this means that sidelining could result in the loss of the property that you have decided to watch and wait. Unlike stocks and bonds, each house is unique and therefore subject to it's own type of supply and demand. All it takes is 1 other buyer to want the same property and suddenly there is more demand than available supply. The thing to keep in mind is that the entire market is representative of the recent slump in values. If you buy now, you may not be at the very bottom of the curve: It may have already come and gone, or it could still be ahead. Your goal should be to buy somewhere near the bottom of the curve and that is where we are right now.
Real estate is still a long term investment. The recent boom years are not the norm. Keep this in mind as you look at minute by minute snapshots. Just ask anybody that bought a home in 1986 and DID NOT try to sell it until 10-15 years later.
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