Pricing your home at market value is generally a better (and more profitable) strategy than listing your home at a higher price than what can be realistically expected. If listed correctly from the start, your home will likely sell more quickly, which usually means receiving a greater profit. The longer a home remains on the market, it will almost always sell for less, so it has never been more important to price your home realistically in today’s market.
Much of Colorado’s real estate market should be analyzed by price range. The market as a whole has been quite healthy year-over-year. However, there are some distinct differences. Values have been rising mostly in the below $500,000 price range anywhere 10-16% annually. From $500,000 to $1 million, values have steadily increased from 7-12%, and the over $1 million properties have had great activity and sales, but prices have been more stagnant. This has been changing as move-up buyers are more successful in selling their homes. The under $500,000 market is being fueled by the two largest demographics: Millennials (mostly 1st time buyers representing over 30% of sales) and Baby-Boomers who are retiring, becoming empty-nesters, downsizing, and/or getting re-married or divorced. The move-up buyers are seeing greater opportunities to sell for increased prices while having more selection in the more luxury price points.
In any price range, and even in a strong market, some homes just aren’t selling for the asking price. There can be a variety of reasons including sellers getting stuck on an unrealistic price, potential listing agents competing to acquire a listing based solely on price thus giving the seller a false sense of value, and then of course the home’s location and condition play a large role in the final value. Other factors may include wanting to test the market at a high price but not getting good activity or any offers, and then waiting too long (more than two weeks) to adjust the price.
The longer a home is for sale, the less it is likely to receive full price. On average and based on MLS statistical information, the following observations are fair to expect:
- 7-10 days a home is on the market (especially below $500,000 and priced appropriately) one can anticipate receiving 100-103% of the list price
- 15-22 days on the market look to receive 97-99%
- After a month, you can expect no more than 96%
- After two months, don’t expect more than 94% of the original list price
It is important to adjust the home price in the first 1-2 weeks of listing a home if activity is low and there have been no offers. Waiting too long for a reduction, and only making tiny adjustments will generally put you in a position of chasing the market and probably accepting an offer below where you could have achieved much earlier. The purchase or sale of a home is one of the most important decisions you can make. Ensure success in your real estate endeavors by seeking guidance from the very best.