We’re in a market like we’ve never seen before. Pricing a home is harder now more than ever. Buyers demand more now than ever. How do you price your home ahead of the curve and still get showings? How do you buy and home and still feel like you are getting “the deal?”
Pricing is at the center of real estate sales success. If you don’t have good pricing strategy and counseling, all the marketing in the world will do you no good as a home seller today. The goal is to always price ahead of the market. For example, if the market is improving at a rate of 0.05% each quarter and there’s a track record for that of at least two quarters, you’ll want to price your home on the upward swing. The same holds true for a declining market. If you price your home based off three months ago’s prices, you will sit on the market becoming stale and questioned.
Below, you will see the Nashville MLS Area 1-8 sales for May 2009 through today’s date. Notice that the red line is all over the place. This tells us that Nashville’s market over the past 12 months has been completely unpredictable. It also tells us from the lowest point to the highest price point there has been a 15% spread. The extreme low and the extreme are so skewed from the rest of the number set, that if they are discarded and we only look at a 12 month (rather than charted 14 month) spread, the dissonance is 9%.
Click to enlarge. Single Family Residential category for RealTracs MLS areas 1-8 only/Davidson County. Condos, multifamily, auctions excluded from data set.
The unit sales were so low in January (268 homes) and February (363), March’s $186,548 average sales price is an obvious reaction to the few homes that moved from the market in the two previous months. Once those sellers reacted to the supply-demand dissonance in early 2010, the prices hit bottom then immediately climbed again.
As a buyer, you need to realize that the Nashville market isn’t hard hit like other markets nationwide. We have had price fluctuations this year, but nothing like what you’ve heard horror stories about. You have to realize that sellers have no pattern to follow on pricing nor do their agents. The good news is you know you are buying in a confident, strong market. The bad news is, you may not see the discount on the price you had hoped for.
As a seller, you need to realize it can be an okay time to sell; however, you may be left with one of two decisions in your sales strategy. (1) Sit tight for the price you want within the market and understand the market may take a bit longer to absorb the home or (2) Price as low as possible between 9 and 15% below current market and move it quickly. The most important thing is to bring a good attitude to the table. This market has little room for high drama and bad attitudes. Also, remember, when you get lucky enough to get an offer, it will be low.
As long as you can grasp these statistics and analysis, you’ll be just fine in this Nashville market. If you cannot, you may want to hang out for a little while.
