Home Pricing Trends

March 6, 2014

There seems to be a trend with homeowners (and Realtors) of overpricing homes recently.  I cannot say whether it is being driven by the homeowners or Realtors being overly optimistic about rising property values. The normal pricing strategy for Realtors is to look at comparable, recent (60-120 days) closed sales in the same area for similar properties.  I know of several cases recently where that sound pricing strategy is not being used.  I’ve seen homes priced at $50,000 – $100,000 over what comparable homes in the same neighborhood have sold for in the previous 60-90 days (in the $400k to $500k price range)!  That’s rather optimistic appreciation in such a short time.  In fact, it makes no sense at all.  If a homeowner truly wants to sell their home, it needs to be priced based on what has sold and closed within a recent timeframe, or expect the home to have very few if any showings, and certainly no offers.   Realtors are doing their clients no favors by overpricing their home – it just means the house will sit on the market with little or no activity for an extended period of time, until the market slowly increase to a higher level, or until the list price of the home is reduced to a realistic price point.