Time was when I would tell clients that the sold comps were what we had to consider, as that is what we used to justify the asking price. Times have changed. Significantly.
Now when pricing a home, we have to consider the sold comparable homes as a measure of the asking price, but we have to consider the active competition even more. In the boom market, there were very few homes from which to choose. That is no longer the case. More and more when pricing home, we have to look at how many homes (because there are now more than one or two in each neighborhood) are actively on the market, for how long (because they tend to stay on longer than five or six days).
After analyzing those aspects and running the house through several different price analyses, then we decide whether and by how much, we need to undercut the competition. The market has changed. We will have a better feel for how much it has changed in March/April.
Take heed – no longer can a home’s asking price be realistically set by the metric of “I have to clear X dollars.” Realistic expectations are welcomed.
*Disclaimer: all real estate markets are decidedly local. What I write about the Charlottesville area real estate market may or may not be applicable to the Phoenix, Denver or D.C. real estate market.
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You’ve hit the nail on the head, Jim.
Comps only tell us what a property may appraise for… not what it will sell for.
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