90% of Homes are Overpriced

90% of the homes on the market in Spokane Washington are overpriced and that is fairly typical for the rest of the country.

When you consider that the National Association of Realtors is reporting the highest sale prices on existing homes since 2006 and Spokane has had a record summer in sales volume and prices, you might question where I got this information.

Ok, I’m shooting from the hip on this one but I think I am pretty close. I’m in the market every day, I work with buyers, I have listings and I know most listings are overpriced.

The ones that are priced correctly sell and they sell fast. Because they sell quickly, they don’t linger around to affect this statistic month after month.

Let’s look at it this way. If half the homes that are put on the market each week are priced correctly, then they will sell within the first week or two. This only leaves the overpriced ones. The next week more homes will come on the market and some will be priced correctly and others will be overpriced. Again, the overpriced ones will hang around for a while.  

As you can see after a few weeks we have a glut of overpriced homes on the market.  The housing market is very active and homes are still selling, just not the overpriced ones. After 3 or 4 weeks the overpriced homes will start to get price reductions, hopefully, and eventually many of them will sell.  

With this in mind, if you see a home that has been on the market for more than just a few weeks at the current price, it is probably overpriced.

When you put your home on the market, pricing it correctly is very important. If I am correct in my assumption that 90% of the homes on the market are overpriced, than what do you use as comparables? Sold homes. 

Think about it. If you want your home to be on the market for several months, price it like the one down the street that has been on the market for several months. If you want your home to sell, price it like the ones that have recently sold.

This is a "must read" if you are selling your home  Pricing Your Home Correctly.