Pricing of listed homes remains key

According to the study from the Demand Institute which was conducted by The Conference Board and Nielsen, the real estate market is expected to have bumps in its recovery over the next five years because the improvement in real estate markets is tied to the strength of their economies.

It is forecast that the median price of single-family homes in 2018 will be close to prices seen in 2006. The 50 largest metropolitan areas are expected to increase between 2012 and 2018. The top five areas — Memphis, Tampa, Jacksonville, Milwaukee, and St. Louis — are projected to have an average increase in home prices of 32%. The bottom five areas — Washington, D.C., Oklahoma City, Denver, Minneapolis, and Phoenix — are expected to have an average decrease in home prices of 11%.

Also of interest are the five states expected to see the strongest gains in median prices — New Mexico, Mississippi, Maine, Illinois, and New Hampshire.

The states having the lowest expected increases in median prices are Minnesota, Virginia, New York, and Alaska. (Note: Washington, D.C., was a part of this study.)

The study further forecast that the national median price for an existing single-family home will increase at a lesser pace in the near future than in 2013, when prices increased 11.5%. The study anticipates that prices will increase at an annual rate of 2.1% between 2015 and 2018 as supply and demand are more in alignment.

A reader recently posed the question whether there is value to having a property appraised before listing. A homeowner who wishes to have a local and professional appraiser assess his or her property may certainly do so. However, a Realtor can provide a thorough assessment by looking at what properties have recently sold, are under contract and are actively listed in the area of the subject property and discuss pricing strategies.

If the property is getting showings without offers, a price adjustment is warranted.

Appraisers often consult Realtors to find out about properties (e.g., in the case of a pending a sale, asking whether the home is selling close to or at the list price). Properties currently on the market, in the subject property’s neighborhood, are important to pricing a property. A homeowner with the help of a Realtor can put himself or herself in the position of a buyer seeing homes that would be considered along with the home being put on the market. Realtors can share the advantages and challenges of competing properties, given their knowledge of buyer perspectives.

Appraisals are a snapshot of the market. The market is dynamic and needs to be monitored. Realtors take into consideration a homeowner motivated to sell or ones that are less so. In some cases, a property is appraised by a bank for refinancing or other reasons, but the market may not agree with this value.

The more the homeowner is knowledgeable about the market, the better the Realtor is able to appropriately price the property. In the end, it is the market that determines value. Days on the market and feedback from showings will reveal the appropriateness of the pricing strategy chosen.

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be emailed to [email protected] 

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