Many homeowners wonder if this is a good time to sell, especially with so many recent news articles stating that prices seem to be rising again. Although many economists had predicted that we would have a “buyer’s market” by the end of 2006, this is definitely not a “buyer’s market” now, although the extreme “seller’s market” of 2002-06 is certainly past. Home prices in Santa Monica, Brentwood and the Palisades increased on average more than 20 percent each of those years, then slowed down to below 10 percent last year, and now are likely under a two percent rate.
One of the reasons prices appear to be increasing is that the average sizes of homes being sold are slightly larger. Another factor is that many homes on the market are not priced to sell, thus inventories are higher while sales are lower.
There are currently enough Santa Monica, Brentwood and Palisades homes for sale that it would take about three months to sell them all at the current rate of sales. A “buyer’s market” here is when it would take more than five months to sell all the inventory.
I think this is a great time to sell. However, pricing strategy has become very challenging as the market conditions have become more “normal.” For several years it was easy to price a home. Even if it was 10-15 percent too high, market momentum eventually got it sold. If it is priced five percent too high today and not adjusted within a month or so, the home may not sell at all.
Despite many news articles, some sellers will not accept the fact that prices have leveled off. Often their expectations are fueled by what someone else’s home sold for last year, when the local prices were still accelerating. Others compare their home with one for sale nearby, and erroneously set their price in relationship to that home’s asking price.
Be sure that the agent you hire is quite familiar with all of the relevant details of comparable homes. The condition, extent of any upgrades, size and usability of land, and degree and angle of any views are all significant factors that affect value differences. It has therefore become even more important that you work with an experienced expert if you decide to sell your home.
I suggest that you ask many questions of an agent you are considering, to ascertain their market knowledge as well as skills in marketing and pricing strategies. You should be able to have a realistic set of expectations and not merely be told what they think you want to hear.
Once you have decided which agent to entrust your home marketing with, it is worth working out a detailed plan together of how you would prefer the pricing and marketing to be done. But pricing a home is not a one-time decision in this marketplace. You need to be open to continued consideration of any changes in the marketplace that might affect the perceived value of your home.
New listings, recent sales and price adjustments on other homes for sale may impact your situation significantly. You should insist that your agent gives you a detailed update on such aspects of the market at least once a month, and require regular feedback from every showing of your home. Also get a monthly activity report from such places as the MLS and Realtor.com.
If market conditions and feedback indicate, consider adjusting your price after a few weeks of full marketing exposure. Be sure that your agent has followed through on all of the advertising, Internet placements, special featuring pieces, direct mailings, etc. that were promised to you.
If you plan to sell your home this year, sooner may be better. Good luck to you for a smooth and relatively stress-free transaction.
Michael Edlen provides real estate counseling services to prospective buyers and sellers and helps over 60 clients move each year. More tips and information are available at MichaelEdlen.com. He can be reached at 310.230.7373 or Michael@MichaelEdlen.com.