Why does realistic pricing matter in the current real estate market?

By: Sherry Baker

Why does realistic pricing matter in the current real estate market?

The Buyer’s Perspective

As the local real estate market continues to change in Whistler and Pemberton, it is enticing to try and cash in on previous highs and push the boundaries in pricing. However, in the current real estate market, there are a few other considerations to keep in mind:
 
  1. With high median real estate prices, combined with increasing interest rates, many buyers are close to being priced out of the market. Now that inventory is starting to climb, potential buyers have more options, the pressure is off, and many buyers are no longer willing to pay top dollar and/or complete in multiple offer situations.
     
  2. With unprecedented access to real estate data, buyers today are more educated than ever before. They know current market conditions and trends, and they are often unwilling to pay more than fair market value.
     
  3. As inventory increases, buyers know that everything is negotiable, and many are shying away from homes that are outdated or in need of repairs unless they can score a significant deal. As a result, well-staged, well-maintained and updated homes in desirable locations that are competitively priced are the ones that sell.
     
  4. When buyers secure financing to purchase, the bank’s appraiser will verify that the contract price does not exceed current market values, If the price is too high, the bank will only lend to the appraised value and the buyer will need to make up the rest.
     
  5. While cash was not as much of an incentive in the superheated market, now that things are cooling, well-heeled and pre-approved buyers are out shopping for bargains.

Realistic Pricing Strategies

As you consider your pricing strategy, a few ideas to keep in mind:
 
  1. Home prices are very similar to the prices of stocks on the stock market: they fluctuate up and down as market conditions change. The only price that matters for any given stock is the amount an investor is willing to pay on the day you choose to sell. 
     
  2. You might not be getting the same amount you would if you had sold a few months ago, but even though the market has fluctuated downwards, your gains will still be substantial as prices remain at historically high levels.
     
  3. As the market continues to soften, we are moving towards a buyer’s market. As interest rates continue to rise, the short-term projection for the housing market is that prices will continue to slide. The sellers who are currently seeing their homes sell are those who are pricing ahead of the market.  Many who are priced higher either end up lowering their prices substantially to get a sale or end up taking their homes off the market altogether.
As the market continues to change, the bottom line is that although prices soared in the previous overheated market, our new reality means that some of those gains will need to be adjusted to get a property sold.

If you are wondering how this will impact you or what your home is worth in today's market, get in touch!

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