We’ve left a busy September, and heading into the last stretch of the year for home sales. Whether a home sells quickly for above its asking price is still highly dependent on whether it’s over or under the $1 million mark.
As the data shows us again for the past month, properties in the sweet spot over $500,000-$1 million are typically selling quickly and getting more money than the listing price. In September, we even saw some in the $1.5 to just over $2 million range sell in less than a month.
But, once again, those over $2.5 million price are lagging behind. The homes in that price range that did sell either sat on the market for a while or executed a significant price reduction prior to receiving offers.
Still, houses are selling. That said, it’s taking longer than sellers are used to, and price cuts may be necessary.
Looking to the end of the year
Based on past years, we’re still set to see two key activity spurts expected this fall — one in October, from buyers who want to be moved in by Thanksgiving. The next will come in November, for buyers wanting to move in before the holidays or those wanting to make settlement before the end of the year for tax purposes.
But that’s no guarantee a home over $2.5 million will sell. It’s frustrating for sellers and for their brokers when a home that seemingly has everything a buyer needs sits on the market. I have a listing like that right now. It’s a real head scratcher — it ticks all the boxes. It’s in a prime neighborhood, a great value, has a desirable layout, and the perfect number of bedrooms and baths. Either the buyers in this segment have purchased for the year, or the next buyer is days or weeks away from acting. It only takes one buyer to buy a house. Only time will tell.
Taking control of the situation
Despite doing everything we can, sometimes there are market forces beyond our control. In some cases, those buyers looking for homes above $2.5 million have already bought for the year. That’s something I can’t control and neither can my sellers. So I concentrate on the things I can control, working my contacts and network of other brokers and relocation specialists, keeping my marketing and advertising current, and following up immediately on any inquiries.
If you’re selling now
I remain positive heading into the end of the year, though some people will warn there’s a seasonal slump coming after Thanksgiving. I’m not a big seasonal thinker. I don’t shut off in the fourth quarter, which has resulted in great sales numbers in November and December. Most sellers only sell a home once or twice, so it can be harder for them to remain positive after being on the market for a few months.
When dealing with a frustrated seller it’s extremely important to stay calm and focus on the activities within our control. For a home that’s not selling as quickly as I’d like, communication with my clients is incredibly important. In real estate, no news isn’t good news, no news is bad news. Making sure I tell my clients in detail how I’m marketing their home this week, who I’ve contacted, what leads were followed is vital to our relationship. In some cases, this can be the deciding factor in keeping a listing or losing a listing. It gives my clients peace of mind — that it’s not going the way either of us want, but I’m pounding the pavement to get the job done.
As the year winds down, some sellers get disheartened. There are things sellers can control. You have options.
1. You stay on the market, while everyone else de-lists and regroups for the spring market. You’ll see your competition go way down. Your chances of selling go up even higher.
2. Wait until after mid-November and that spurt of activity, take it off for 90 days, then come back on in March as a new listing.
3. Consider a strategic price reduction. A move down from $2.6 million to $2.49 million (for example) opens up a whole new market. You have now just opened your visibility to a buyer segment that was not ever looking over $2.5 million. Lower the price and — to that target market — it’s a new listing.
4. Pull it off immediately.
Right here, right now, in the over $2 million range, I like the idea of cutting the price and staying on the market. You never know when a relocating executive is going to take a job and need a premier property. In Seattle, it’s happening on a regular basis given our expansive job growth.
The good news
It’s a function of time and opportunity. There are fewer houses on the market than there were in the spring. Sellers will benefit from a smaller pool of competitive homes.
The number of jobs being created right now is off the charts — we see Seattle companies adding thousands and thousands of opportunities. Amazon is hiring, Expedia is moving downtown and we’re primed for that. All of this hiring means there’s probably someone in the Bay Area who accepts a Seattle job today, and needs a house for the relocating family in weeks, not months. And we’re in an ideal neighborhood for those people.
A fair number of these candidates filling those jobs are looking for houses above $2 million. That tap is still on.
By Chris Sudore