Are you considering selling your home? If so, you may have come across the advice to "price it high so you have room to negotiate." While this strategy was once common, it's essential to understand that times have changed, and this myth may not hold true in today's real estate market.
The notion of pricing a home high to allow for negotiations gained popularity during the period from 2008 to 2014. This was a time when the housing market had an abundance of available homes, averaging around 2.7 million for sale at any given moment. This surplus of housing created what was known as a "Buyer's Market," signaling that there were more homes for sale than there were buyers actively looking.
In a Buyer's Market, the scales tipped in favor of those looking to purchase a home. With an oversupply of homes, properties tended to linger on the market for extended periods. When a potential buyer did emerge, they often wielded significant negotiating power. Sellers found themselves in a position where they had to entertain offers lower than their asking price, resulting in homes selling for less than their perceived market value.
Fast forward to today, and the dynamics of the real estate market have undergone a dramatic shift. The current situation is characterized by a housing inventory shortage, with only around 800,000 homes for sale compared to the 2.7 million during the 2008-2014 period. This scarcity of available homes has transformed the market into what is now known as a "Sellers Market."
In a Sellers Market, the demand for homes far exceeds the available supply. This imbalance has led to a significant increase in home values. Contrary to the previous myth, pricing a home at or near its "Market Value" from the beginning has proven to be more effective in the current real estate landscape.
Homes priced appropriately in today's market often sell promptly, with many sellers receiving their asking price or even fetching more than they initially anticipated. The scarcity of available properties has empowered sellers, providing them with the upper hand in negotiations.
In conclusion, it's crucial for sellers to recognize the evolving nature of the real estate market. The advice to "price it high so you have room to negotiate" may have been relevant in the past, but in today's Sellers Market, pricing your home right from the start is key to a successful and profitable sale. Don't let outdated myths guide your selling strategy—understand the current market dynamics and position yourself for success.
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