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What Do All the Recent Price Reductions Mean to the Real Estate Market?

August 25th, 2018 by Michael Mahoney

What Do All the Recent Price Reductions Mean to the Real Estate Market?

by Michael Mahoney of eXp Realty
617-615-9435 | mike@mmahoney.com

 

Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country.

According to the report:

  • There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros
  • About 14% of all listings had a price cut in June
  • Since the beginning of the year, the share of listings with a price cut increased 1.2%
  • This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

Senior Economist Aaron Terrazas from Zillow further explained:

“A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

 

Price Reductions and the Boston real estate market…

If you are planning to sell your home, you want to price the money at the market price. You do not want to price the property above the market price and hope that someone will come in and overpay.

Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation when, in actuality, it just dramatically lessens the demand for their houses.

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

Bottomline…

Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Realtor Michael Mahoney does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any real estate investment decision. Michael Mahoney will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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I selected Mike after having a very unsuccessful experience with a previous broker. He had excellent ideas in helping to sell my house and continued to advertise it with a fresh perspective. His experience helped in a number of ways and I only wish we had... (more)

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This is the second property I have sold in Weymouth MA with Mike as my broker. He research the area and give you all the information you need to decide what to list your property for, so it sells timely. He also helps review and negotiate all offers and is... (more)

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We had been trying to sell our condo for well over a year and decided to give Mike a shot at it as he came well recommended. It was not easy for him but he persisted and had success. Even though it wasn't a big sale or profit for him, he acted as though it... (more)

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