In this slow season of economic resurgence, condominium prices, as well as single-family homes in Charlotte, have stabilized as sellers have adjusted their list prices according to the market.
“Chasing the market” is the phrase real estate agents use in describing a seller’s attempts to mark their list price high and then continue to drop it as long as the home remains for sale.
In 2011 this is a terrible way to sell your property, as the first 30 days are absolutely crucial to make a sale. This is when the residence is the freshest, so market pricing is critical at this stage.
Anything that sits after 30 days and simply reduces the price every month is just “chasing the market” and waiting for the absorption rate to catch them — not a smart way to play the game for those needing to sell. These homes are “stale” and demand fewer showings, compared with their counterparts who list realistically right off the bat.
A growing trend among neighbors is to band together and dictate list price by a shared belief of what their homes are worth. Anyone who strays and actually prices their home according to the market is burned at the stake. Not really, but you get the idea.
Unfortunately, for neighborhoods such as these nothing sells. These are the desert places, neighborhoods that haven’t seen sales since spring 2010. However, there are those desperate enough to break the pact with their neighbors, either forced by relocation or lost jobs, and these are the homes that actually sell, leaving the other listings around them fuming.
Ironically, the difference in the band of listings trying to hold their home value at $20,000 to $30,000 higher is not that much in the grand scheme of things and not worth losing a pulse in the sales market.
To get an idea of where we stand consider that from Jan. 1, 2007, to July 29, 2007, there were nearly 300 condo sales in uptown, with the average price upwards of $400,000 for a two-bed, two-bath. Flash forward to that same time frame in 2011, where sales were closer to 100 units sold with an average price closer to $300,000 for the same square footage.
Applying these market conditions, new construction, like The Vue, which offers luxurious amenities and skyline views, is running specials for two-bedroom units in the $300s. And Octadia, in the 3rd Ward, which features green upgrades and energy-efficient utilities, is listing in the high $200s. Both complexes are competing in a shrunken market. But by offering realistic sales prices, they continue to hang on.
Demand in single-family residences in neighborhoods like Myers Park, Dilworth and Plaza Midwood is peaking as there are fewer residences listed than two years ago, and those that are listed appropriately are selling within a few weeks.
In Myers Park, about the same number of homes sold in the winter/spring quarter in 2007 and 2011 — around 100 — but the average home sale was closer to $600,000 than $700,000 in the prerecession market. The number of million-dollar-plus homes that have sold this year is also significantly less than it was then.
List price is the most important factor in selling a home right now. If sellers can adjust their pride and expectations, the market can continue to adjust itself, and one day soon they just might be back on top.
Of course there are those sellers who continue to pretend that market forces don’t affect their home sale based on their tasteful kitchen and bath renovations. But the time has come for sellers to take an honest look at market activity, take a big gulp and list to sell.
Anything other than this approach right now simply wastes the listing agent’s time and gluts the market with another “for sale” rotting away in the front yard for a year or two.