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In two neighborhoods in different parts of town, there are two houses I’ve been watching. Both are at different price points but the house in neighborhood #1 has been for sale 256 days and the house in neighborhood #2 has been on the market for 305 days! Today I saw two new listings come on the market in each of those two neighborhoods. The new listing in neighborhood #1 is $60,000 more than the first house and it is the same size, same floor plan and same year built. The second house in neighborhood #2 is only 20 sq. ft. less, same builder and same year built but is $136,000 more. What? The first two houses have been on the market for about a year and are over-priced. Neither of these houses has sold but these two new listings are now worth $60,000 and $136,000 more????

Per our latest stats, we have 9.1 months of inventory. It would take that long to sell all the houses for sale with no new listings coming on the market. We haven’t had this much inventory for sale in a long time! I’m also seeing houses that didn’t sell last year, taken off the market over the winter, come back for sale either at the same price they were when they didn’t sell the first time or for more $$$. What’s with that?

I’ve been advising my sellers that if they are really motivated and want to sell they need to reduce their asking price every 3-4 weeks. I recommend they sign price reductions at the time I list their property. On the date the price reduction becomes effective, I then proceed to reduce the price. I did this in both the 1980’s and 90’s recessions. One of our trade journals recently recommended that every 60 days an asking price should be reduced in order to sell the large inventory of homes that are for sale all across the nation!

In the 1990’s recession, I had a house listed that had 5 pre-signed price reductions. We got to the third and the house sold. The sellers were delighted not only to have their house sold in that tough market, but they didn’t have to get to the 5th price reduction. No one ever knew the sellers and I had that agreement.

Earlier in the 1980’s when interest rates were 21%, I did the same thing. During that recession, I had a house listed for 3 years!! The sellers started listening to me about price reductions too late and lost the house in foreclosure. Finally, when the bank took my suggestion of pre-signed price reductions, I got my listing sold during 21% interest rates. That was one of my best selling years even with rates so high.

What are sellers thinking? This is not the time to list your house higher than the houses that haven’t even sold yet. Price is absolutely everything. Sellers need to stay ahead of the market and be very aggressive in pricing. If you over-price a house, you’re always going to play “catch up” with the market. Pricing a house 5-10% below the market is the only way to assure you will get your house sold today. If you aren’t getting any showings, your price is too high. If you’re getting showings but no offers, the price is still too high. Those buyers who looked at your house are comparing yours with the other houses they saw and are buying those instead. What are these sellers thinking???

I forgot to tell you, the two new listings mentioned that came on the market today, they do have granite counters. Read my blog next week entitled The Granite “Rut”, and you’ll see how I feel about granite countertops!!

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