“Chasing the Market” & “Downward Pressure”

Downward pressure on pricing in the market occurs in the Buyers market, where not only are we consistently seeing conditional offers, we are seeing a downward trend in pricing, either among property types or across the board with Real Estate.

"Chasing the Market" refers to continued readjustments in a listing’s price to catch up to renewed market evaluations given comparable sales. The issue with this phenomenon for Sellers is that typically by the time a Seller has readjusted to a supported price point, the interested buyer audience has already moved on to different properties that meet current evaluations, and time is now added to the listing process waiting for the next right Buyer. Further, the longer a property sits on the market with downward pressure in pricing as comparable properties continue to sell, the less Consumer Confidence Buyers have in the home, because "Why hasn't someone bought it, or made an offer?" A lack of activity on a property can read to considering Buyers as a red flag, even when they can't specify what that red flag might be. 

Sellers often think Buyers will consider the price and negotiate, which is not always the case. Sometimes, we receive a lowball offer, a negotiation comes of it and on a rarer occasion, a successful collaboration. More often than not Buyers will find a property with minimal to no negotiation window in pricing given current evaluations and move that direction if it generally meets their personal check boxes. Buyers are more pragmatic today, where the emotional impact of a property no longer necessarily outweighs the fiscal overview, for the immediate future and long term.

Sellers are best positioned in Downward Pressure markets when they are priced Sharply, and this means 1) competitively and 2) supported by real time comparison. A number is never guaranteed, but a range is discernible with comparable sales, and positioning competitively against that range pushes you above the rest when Buyers are cautious, calculating and fewer. 

Moving quickly with the market is in your best interest as Sellers. Delaying necessary adjustments for generic time frames with no deadlines or eyes on your surroundings risks 1) failing to capture current interest and 2) stigmatizing the listing.

Buyers with good Realtors have access to listing histories, are being provided real time data consistently, and Buyers are on top of this research ahead of their representatives more often than not. Further, while the Seller often has personal evaluations for components of their home they have cherished and valued, Buyers are holistically approaching not only your entire property, but several at a time with much more care and caution than in the past.

Resale is also up against the province wide New Build HST Rebate up to 1.5M or less as of April 1st, which has impacted resale listings given new build properties at similar price points now offer more value, up to $130,000.00 at the higher end.

Global and domestic crises have also had impacts on Buyer motivation in recent years, so it is in the Seller's best interest to tackle every angle in overcoming Buyer hesitancy and apathy. Across the board, we are still adjusting from the over inflated sales prices of the COVID pandemic years which saw properties sell in multiple offers, at the higher price points, up to hundreds of thousands over asking.

Professional staging and media, a professionally cleaned and maintained home, accessibility of viewing and communication, these are all critical elements to a successful listing, however, they only support a successful sale at a current maximized value when a property is priced competitively against the curve. If the objective is to sell at this time, it is imperative to price sharply and move quickly.