The region’s beleaguered real estate market exhibits renewed strength with each passing month. Practically no one, not even the most skeptical observers, will dispute that the market has perked-up considerably. For most of this year, closed sales have steadily crept upwards, pending sales have taken a remarkable bounce; and the inventory of available homes has fallen-off sharply.
Buyers, once content to occupy the sidelines while prices remained in free-fall, have finally been jolted into action by prices that have not only leveled out but have actually begun to inch-up again in the under-$350,000 price range—along with (surprise, surprise) suddenly-rising interest rates. They are also anxious to close on their desired property before the First-Time Homebuyers Tax Credit expires on December 1. Something of a misnomer, the First-Time Homebuyer Tax Credit is available to anyone who hasn’t owned a primary residence in the past three years.
Alas, a similar trend toward recovery has yet to firmly take root in the $ 1 million-plus price range; because many sellers have yet to align their expectations with the new realities of the market. Yet as the most recent MLS statistics show, properties are indeed selling where prices have been adjusted downward by an average of 28 percent off their original list prices. Some prices require greater adjustments, some less. We thank each of our sellers who have taken this important message to heart, allowed our agents’ expertise to update their thinking based on the latest data on sold properties; and made the necessary adjustments to their selling prices.
Just as homes from $350,000 and below began to sell briskly once their prices were reduced substantially—due to the impact of foreclosures and short sales—homes in the $ 1 million-plus price range need to be priced in line with what comparable properties are selling for. In this respect we are no different from other high-end luxury markets like the Hamptons, Aspen, Vail, Palm Beach, Boca Raton and Miami. Conferencing with the top brokers in many of these markets strikes the same familiar chord: The difference between average list price and the price that finally brings a buyer to the closing table are often apart by as much as 40 percent.
The graph below depicts the substantial divide between today’s average list price and what $1 million-plus homes in Southwest Florida are actually selling for, as of May 2009. In the last six months, the difference has averaged 28%, meaning that the average seller may have to lower their price by at least that much to prompt a sale. Fortunately, the trend in recent sales has shown that if the price is right, the buyers are there.
Sellers of luxury homes who list with Michael Saunders & Company have several unique advantages. Because we list and sell more $1 million-plus properties—by far—than any other real estate company in Southwest Florida, we are better positioned to help you price your home correctly from the moment you list it. Or, if it has already sat mute on the market for some time, we are able to advise you by how much you must reduce its listing price to make it sing. At the present time, there are over 1,418 homes in Manatee, Sarasota and Charlotte Counties listed for more than $1 million. Buyers barely have the time to visit the homes in their desired price range that are priced correctly, much less those that aren’t.
Further, as the latest TRENDGRAPHIX shows in the bar chart below, Michael Saunders & Company continues to bring more buyers to the closing table on properties listed above $1 million than virtually the next three competitors combined.
It’s a fact. You can’t change the market we’re in, but you can heighten your ability to sell your home in a reasonable time frame. Price it in line with the market from day one and it will become an immediate standout to buyers actively searching in its price range.
In just the past two weeks, agents of Michael Saunders & Company have successfully positioned their clients ahead of the market to the tune of more than $30 million in price reductions. Our goal by mid-summer is to at least double that amount so that every priced-right property finds its new owner faster. With statistics proving that the average list price needs to be reduced substantially in order to move it into the sold column, now is the time to act decisively and stop chasing the market down.