Interest rates are so low now that a family can buy the median price US home on an income of less than $45,000 a year, about $11,000 less than the median household income. And half of America’s houses are cheaper than that. Again, the median price, half are above, half are below. A family with a $45,000 income can buy a house right now, the median priced home right now.
Despite having limited inventory and rapidly rising house prices in many markets even with inventory being so short, the current momentum is likely to carry us through the remainder of the year so we will end up with the best year in home sales in a decade. But, understand, when it comes to prices, we can’t assume that prices are going to continue to go up the way they’ve been going up. As more and more supply comes to the market, then the supply and demand ratio is going to change and prices are going to start to balance out.
So, please, don’t price your houses way above the market. And it has been a challenge, especially in some of the upper end right now. Prices in the upper end are not coming down. Asking prices are coming down.
That’s because they got a little out of whack. Probably the best example of what we’re talking about is this graph.
This is the percentage of potential buyers who look at a property based on where you price it. If you price it exactly at market value, about 60% of the buyers will see it. Pricing it 10% above market value might have been an okay strategy a year ago. It’s not an okay strategy right now. What we want to do is get the most money for that house, by turning it around and price it just a little bit below market value. Get 75% of the people that are looking at that type of house to see your particular listing because the best way to get any seller the most money is not to let the seller fight with the buyer.
Either you are going fight with a buyer or two buyers fight with each other. Let’s make sure your house is accurately valuated. The key is to always look at what’s happening in the market. And one way to do that is to consult with a real estate professional in your area. Meet with us and we’ll help you sell your house, competently!
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