Comment by mbac32768
1 day ago
I'm in the market right now. Anecdotally, it seems like there's more inventory available today than at any time in recent memory, but attractive properties still sell fast while loser properties pile up.
I'm not quite sure what the underlying explanation is. Perhaps there's a class of sellers that bought or refinanced at low rates and high valuations and now that rates are up and valuations have slid they can't find buyers that will accept the previous high valuation.
Look at days listed. Any property will sell at the right price. After 90-120 days, it obvious the price is too high and the seller is not motivated to sell. The listing realtor will try to provide market guidance and advise to cut the price if needed, but humans can be emotional and irrational. Prices take the elevator up and the stairs down.
It’ll take time, but those who must sell will, and they’ll set the downward price momentum with comps.
Given typical realtor behavior, I’m amazed any house is overpriced. Seems like they push sellers to sell below market and buyers to go above market.
I knew market prices well from doing my own property tax protests.
Our damn realtor strongly advised on a price close to $100k lower than we insisted.
House was in average condition and not recently updated. Said we were overpriced.
Multiple offers above closing on first day of listing.
Closing price was still significantly above asking.
Stupid damn realtor!
This is from a mismatch in incentives and is well known.
The agents maximize their income by getting lots of quick sales. The seller maximizes their profit by being prepared to wait.
https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
Yes. I know. I wonder if they persist in asking too much because they're overly leveraged. My second paragraph.
If they were overleveraged, they’d be doing a short sale or foreclosure (if you’re underwater, a traditional sale is off the table unless you can bring the negative equity in cash to closing). Otherwise, you are spot on. Sellers who aren’t cutting prices don’t have to and can ask their “make me move” price, to your point, either because they have a low payment or low interest rate. In some cases, they turn into accidental landlords to get the cashflow instead of concede on price.