Let the Game of Chicken Begin!
We’ve seen more inventory since the fall selling season began than we have in several years in the city, with the excellent properties still moving at a record pace, and the just decent properties taking longer to sell.
What happens now to the fully respectable but possibly not excellent properties is a game of who will blink first– the buyers or the sellers. Will the sellers reduce their price, pull it from the market and re-list in spring, just rent it as every seller who doesn’t have to sell threatens to do, or employ the new trick du jour of dramatically dropping the price in order to inspire hopefully a new round of multiple bids?
The latest trick du jour seems to be the most successful, thus most popular tactic used to move properties that previously sold in a 2 week period. A dramatic price reduction (often below what the seller will actually take) is the hook to get fence-sitting buyers off their wait and see morals and actually take a stab at writing an offer. Once that hardest part, putting pen to paper so to speak, is done it’s just a matter of counters back and forth before we see who is going to do the blinking. Sometimes it’s the seller, often times it’s the buyer, and many times that is determined by how many buyers are enticed off the fence.
As we move into the final months of the year, look for more price reductions, far fewer listings, and a lot of withdrawals of properties from the market. Those withdrawn may be re-listed in the new year, but just as likely could be lost to the vast rental pool and disappear for a year or so.
I still maintain this is an excellent time to shop for a property, with the buyers bold enough to actually write an offer (below asking if the property warrants it) being the most successful. Come the new year, it remains to be seen if the steady drum roll of property appreciation will continue, but if history serves then spring will likely see a new round of price valuations hitting new highs.
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Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@luxsfre.com