Fewer sellers are cutting their asking prices and when they do cut, it's not as deep, according to a recent analysis of the housing markets in major U.S. metro areas.
California-based ZipRealty Inc. looked at August data in 27 markets. It found that homesellers had reduced their list prices by an average of 9.59 percent, which is 1.67 points smaller than July's average price cuts. Also, there were 12,000 fewer home listings with price cuts than in July.
Raleigh-Durham was one of the stronger markets it tracked. Price cuts there averaged only 4.36 percent. Its North Carolina sister, Charlotte, averaged 6.63 percent.
ZipRealty does not track the Greenville-Spartanburg market. Looking back at Greenville’s August sales numbers in an attempt to make an apples-to-oranges comparison, the median list price was almost unchanged compared to last year: $189,900 (August 2009) vs. $189,970 (August 2008).
There is a difference in sale prices, however. The median was $145,800 this August compared to $157,044 in August 2008.
How much of that has to do with sellers cutting prices? How much has to do with more sales of less expensive, starter-type homes? How much has to do with foreclosures taking up a larger share of the market?
For now, it is hard to untangle those three factors. But I talked to a Realtor recently who reiterated the importance of pricing a home correctly the first time.
She doesn't do a huge volume, but the listings she has had recently all seem to be selling in about six weeks.
“I think the key to that is the right price,” she says.
She adds that making sure the home is well-kept and freshly painted (if necessary) is important, too. It seems that a home with the wrong price, an unruly front yard, or eccentric interior decorating creates a stigma in the minds of buyers' agents.
When they keep seeing that same home pop up in the MLS listings, that poor first impression pops into their minds as well, even if the price has been reduced or the house has been cleaned up.
The Realtor told me that her broker says, “If (sellers) don't want to price it right, let it go.”
It might be painful to give up a listing – and a potential sale – when things are slow. It might be more painful to waste time and effort on a listing that a homeowner isn't committed to properly pricing and marketing.