In AZ, we have a document published by the AZ Association of REALTORS® entitled “Market Condition Advisory.” This document states in bold large letters:
“The real estate market is cyclical and
real state values go up and down.”
Further explanation cites the financial market and its effect on loaning money on real property. As the US financial market is directly tied to the global market and what is happening internationally, there is always the possibility of market uncertainty.
When residential properties or vacant land parcels are listed, the listing agent presents a picture of the current market conditions. This doument is often referred to as the CMA or Competitive Market Analysis. For my listing clients the following information (data) is presented:
- Active Listings
- Pending Listings
- Recent Sold Properties in the last 31 Days
- Properties Sold in last 32-180 Days
This additional data helps to show market trends. With the sold data I indicate the type of financing as well.
What is essential to know for buyers of residential properties or vacant land parcels, is the seller is the one who makes the determination as to the asking price based on the seller’s bottom line and the provided competitive market analysis.
Sometimes the local real estate market within a city to even a neighborhood can have unique changes that reflect price reductions such as:
- Sellers have passed away and their heirs want the property sold quickly. The asking price is considerably lower than recent sold properties in the same neighborhood.
- Possibly the sellers have experienced recent health or family issues that require a quicker sale than when first listed.
- An Investor may be the seller who wants a quick return on this investment
- The neighborhood may have one area with homes that historically have been viewed as less expensive.
- The neighborhood may have much higher price homes within a block or two.
- Maybe the several properties in the neighborhood have been foreclosed
In other words, often price reductions are not because the seller overpriced the property when initially listed. What happened is the market changed in a short time.
Also conversely, the real estate market can quickly change and price increases may also happen.
Those residential sellers who work with professional real estate agents do have a competitive advantage given the agents will provide guidance and notification of changes. This notification is not readily available to For Sale By Owner.
P.S. Please consider checking out my Facebook business page, The Grit and Gratitude Agent that will focus on the Dirt Roads in Mohave County as well local real estate, lots of dirt or vacant land parcels as some of the local attractions.
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Leanne M Smith, The Grit and Gratitude Agent Who Goes the Extra Mile Because Life Begins Where the Pavement Ends.
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