Bridging The Real Estate Value Gap In Westport

Bridging The Real Estate Value Gap In Westport

Throughout my 29 years in the business, I have always found the real estate process fascinating, specifically how buyers and sellers react to changes in the market. Leverage between buyers and sellers is continually shifting. Since mid 2006, leverage has been moving toward buyers, resulting in noticeable pressure on pricing for sellers. For many years prior to 2006, sellers enjoyed the leverage and could list at the “high end of the range” and locational and condition issues appeared to be virtually ignored. Lack of quality inventory and high buyer demand increased the odds of multiple offers for sellers. I remember evaluating the statistics during 2006 and noticing some changes leaning toward buyers. The first two signs of the shift: “Days on market” began to extend and the buyers appeared to be pushing back on inspection issues. Resistance in the market was starting to take shape. Subtle changes of signs of things to come and a whole new real estate reality.

In any market, buyers buy from the bottom up and sellers sell from the top down. Buyers want the best value and sellers want to maximize their investment (home). Both have diametrically opposing viewpoints of what value looks like. Since the market slowdown, the value gap in the middle has resulted extended marketing time, and multiple reductions for sellers.

When working with sellers we cover the specifics of the comparable listings, including recent sales, comparable active listings and expired listings (failures in the market). So, in order to price correctly, we evaluate what has happened in the market (solds), what may happen in the market (availables) and what has not happened in the market (expireds.) “Right” pricing early on in the process creates excitement from the buyers who are searching for value. I equate the initial listing period as the “grand opening” of the house. It’s when almost every listing has, at least, a short period of momentum in the market. Regardless of season, or price point, there is some pent up demand from buyers who will pay attention to any new listings. Buyers watch for value and will also keep an eye on a specific home until significant or relevant reductions are made. Because of buyer representation, agents educate their buyers through showings and providing comparable information. Readily accessed information also fine tunes their ability to spot a well-valued home.

Our market is being severely impacted by many variables in the economy including lack of consumer confidence and fear of job loss. In order to get attention from buyers, sellers need to be aggressive with pricing in the hopes of capitalizing on initial buyer enthusiasm because buyers simply will not overpay. Sellers who close the real estate value gap are being rewarded with showings and sales.

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