The Cost of Waiting

“I don’t have to sell. I can hold this house as long as it takes to sell it.”

That is something I often hear as a Park City real estate professional. We live in a place where most sellers are not desperate or distressed. But is holding on to a property a wise strategy in today’s real estate market?

If a house was overpriced in 2008, it might have taken twice as long to sell. If a house is overpriced in today’s Park City real estate market, it could take four times longer to sell….and the cost may be more than just time. The data shows that this group of sellers may actually net less for their home by “chasing the market down.” Let’s face it. When a buyer sees 245 days on market for a home, he or she may wonder if something is wrong with the home. Clothes that don’t sell get marked down and go on sale. Homes that don’t sell become “stale” listings and also get marked down. Take a look at these statistics:

# Units sold in 4th Quarter of 2008 with 1+ price change: 68
Average sold price to original price: 78.5%
Average days on market with 1+ price change: 188

# Units sold 4th quarter of 2011 with 1+ price change: 95
Average sold price to original price: 80.7%
Average days on market with 1+ price change: 245

In contrast, the average days on market in the 4th quarter of 2011 for properties with no price change was 64.

What is the risk of under pricing? Multiple offers and buyers who bid the price up to market value. The risks of over pricing are far greater.

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