By MICHAEL EDLEN | Special to the Palisadian-Post
I have recently been asked about the increase in open houses and whether this is a good sign for the market. Others have asked if the market is still “going up” and if it’s still a good time to sell.
The answers, of course, will always depend on who is asking and their individual situation.
Overall the market has slowed down significantly, with 30% fewer Palisades homes selling than last year by this time, and 80% more homes available for sale now than were then.
The rate of sales is lower than it has been since 2009, nearly half of the homes on the market have had price adjustments and prices are actually about 10% lower on average now.
The chart to the right shows some differences between the top half and lower half of the Palisades market for the last six months. As one might expect, homes priced above $5 million are taking much longer to sell and indeed may not sell even after a year on the market at current rate of sales.
With a much higher rate of sales below $5 million, sellers can anticipate a greater probability of succeeding and doing so in half the time.
We sold a home below $4 million recently. The owner decided to set the price approximately 10% higher than where we suggested for the most favorable market response. After several weeks of aggressive promotion, many ads and open houses, we received no offers.
We finally were able to make a 10% price adjustment and negotiated a contract within one week. That is an example of a home that, at first, was merely “on the market.”
A couple of months earlier, we sold a home below $4 million. This owner decided to select a price that was intended to receive high market energy in a short period of time.
They received multiple offers and sold it for more than the asking price. This was an example of a home that was actually “in the market.”
With under a six-month level of inventory in the lower half of the market, in theory more of those are likely to be “in the market” as compared with the top half of the market where the odds of selling are clearly much lower. There are definitely fewer buyers as compared with last year, though many sales today still result through multiple offers.
There are clear and definite benefits for the proper pricing and marketing of homes. Indeed, these factors may well determine whether the home will actually sell in today’s market place.
Michael Edlen’s system of strategic pricing has resulted in an average of sales at 99% of recommended list price, with more Palisades transactions for 10-plus years than any other agent. From these sales he has given charitable donations of $1.5 million. He can be reached at 310-230-7373 or email@example.com.