Our local market has been feeling ‘soft’ lately, and I mentioned earlier that it might be good for a 5% to 10% discount off list price….or off the last comps?
It is more a seasonal thing really. The sellers keep pushing the list prices higher all year, and buyers get exhausted by the end of summer.
You can see below how the gap between the average list prices and sales prices widen towards the off season – the Septembers are marked in red:
The motivated sellers will adjust as needed, and we’ll all be fine.
It looks like they already are, generally speaking:
The reason you don’t see many sales close at big discounts is because you have to offer 15% below list to have a shot at buying at 10% below. The vast majority of sellers will laugh you out of the house with offers at 15% off. It’s too easy for them to think it will be better in springtime, and wait.
It’s why you see 5% to 7% discounts off list in the first graph – that is all the sellers will tolerate because they’re convinced that their list price is ‘right’.
While it might feel ‘soft’ because houses aren’t selling like they used to, don’t worry. Sellers who need to sell will re-calibrate over the next 30 days, and set the tone for next spring.
The big question is – “will buyers pay more in spring?’ If yes, it will be only for the vastly superior homes. Anything that is inferior in any way – especially the fixers – will need to be sharp on price to sell. It’s doubtful that they will get any more than they could have gotten this year, and it may take last year’s prices to move some of them.