This Isn't 2022's DC Real Estate Market.
It's changed. And sellers should, too.
You're ready to move on, and you want to sell your Washington DC home quickly... at the highest possible price. But what is that number? Recent data indicates that quite a few sellers are having trouble figuring that out.
- Last week, home showings in Washington DC dropped week-over-week, but improved from the same week last year
- The number of new contracts inched up week-over-week, but down year-over-year, and homes took longer to sell
- Median list price was down significantly year-over-year--and by nearly $50,000. week-over-week
- Fewer active listings reduced their price than the week and year prior. Sellers now seem to be realizing that overpriced homes have been taking repeated price reductions (called "chasing the market") and accumulating days on market.
The result of listing at aspirational prices in a declining market is price reductions, which had increased in prior weeks and ultimately a lower final sales price.
Let's look at the ramifications of overpricing your home:
A changing economy and changing real estate market necessitates a reset of consumer expectations. Home buyers have already adopted this attitude by adding contingencies to offers that would have been rejected outright just three years ago, by searching for turnkey properties priced at market value, and factoring in buyer broker compensation. They're not up for bidding wars and unsourced valuations.
But a good number of sellers turned a blind eye to market conditions and changes in real estate practices in early spring, still insisting on floating overly ambitious prices on MLS. Here's why that hurts a listing's chances:
- The listing is excluded from buyer feeds set with lower price limits because it exceeds their search criteria. That means you're losing a significant number of potential buyers at the start--they'll never see your listing
- Buyers searching in that price point will see value comparisons on third party sites like Zillow and Redfin, noting that their estimates are lower than your aspirational price. They may delay viewing the property--either to watch for a price reduction, or until Days On Market are sufficient that they're comfortable negotiating
- Days On Market climb. DOM is the enemy of listings. The longer a home stays Active on MLS, the more skeptical buyers become that it is a worthy property. "What's wrong with it?" is the common question to agents. You're stigmatizing your own property!
- A price reduction--or many--is a likely necessity. Data shows that properties that "chase the market" often sell at a lower price than would have occurred had the property been priced correctly initially.
Similarly, sellers expecting a multiple offer scenario should remember that the buyer pool is not what it was in 2022. Inventory has ballooned, and economic conditions are less than encouraging.
Pricing artificially low, as many Washington DC home sellers and their agents have done the past decade, could also backfire. While the property might recieve more than one offer, chances are that fair market value will remain an upper limit, and contingencies will still be part of the equation.
How to correctly price your Washington DC home in May?
Start here: https://realestateinthedistrict.com/how-to-price-your-dc-home-this-may/
Comments(3)