In the eyes of consumers, the new “normal” may literally mean “discounted” or “on sale”. Does that spill over into REAL ESTATE?
American Express announced a 43% drop in consumer shopping at department stores over the past several years. Consumers surveyed (who spent $5,000 or more annually) have reduced their department store shopping considerably. The numbers went from 65% in 2007 down to 22% in 2010. Many department stores are taking a nose dive….but discount and bulk stores such as Costco and Loehmann’s are raking-in profits….
Since this is a real estate blog, you’re probably wondering what on earth this has to do with real estate.
Here’s the answer … in four parts:
1) Home buyers want what’s ‘on sale’…
2) They want ‘deals’.
3) They want ‘price reductions’, ‘short sales’, and ‘foreclosures’.
4) MOST IMPORTANT: WHAT THEY REALLY WANT IS VALUE! ***
More and more Realtors are searching for properties with price reductions … as an “indicator of value”. And that can be a mistake!
Contrary to what many Realtors believe, price reductions neither correlate to, nor accurately indicate VALUE ! Frequently price reductions indicate only that a property was overpriced to begin with.
When real estate is priced correctly… based on current market conditions, location, and amenities & features… it sells. Nobody wants to overpay… Few will.
Here’s the clincher: Home buyers will actually offer more money (closer to the asking price) on property that is priced right to begin with. Conversely, buyers will tend to low-ball overpriced listings.
“On Sale” may well be the “NEW normal” … But… home-buyers are not stupid. Anyone working with a Realtor worth their weight in salt knows when something is priced right … Anything that isn’t priced correctly will be ditched for properties that are.
Information is available for the asking… Most of it is free. Any that’s not… your Realtor or real estate attorney can provide you with.
Having facts, figures, stats, comps, numbers … at your fingertips puts you in a better position ( whether you are buying or selling). We look forward to working with you. Call us anytime at 305-793-1365 or 305-632-0164 – cellulars – or send us a message here .
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