Let’s begin by taking a look at the number of days on market for all homes in Smithtown, which is around 179 days. In the last 30 days, there were 70 price changes according to our MLS. During the same period, 11787 saw 20 homes go under contract. That means that there were nearly 3.5 price breaks for every sale.
Now let us turn to the days on market. As you can see from the graph, the number of days on the market has been on the rise over the first four months of 2011. All of these indicators suggest that it has been challenging to sell a home given the number of buyers versus the number of sellers (The numbers in May have revealed a relaxation of this trend but it remains high).
Modern buyers often do not even make an effort to visit a listing until they see enough value online. Lately, I have seen many sellers decide to cross their fingers and hedge their bets by pricing their home roughly in line with the competition. It seems like the smartest choice to protect the homeowner’s equity.
The buying public is very aware of what homes have been on the market, for how long, and what price it took to finally sell. So when there is not enough value created with price, the subsequent buyers that do show up, lack the proper motivation. If offers come, they tend to be much lower than the comps would even suggest as being reasonable. And so begins the downward cycle of price cuts, always trying to catch up to those savvy buyers but remaining just too high to attract a satisfactory offer.
Instead, make an effort to see the market from a buyer’s point of view with repect to what your particular home has to offer and then act decisively on price. It may seem counter-intuitive but you are much more likely to come out ahead with more money and in less time with respect to current market conditions.