“Chasing the Market Down” & “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 Down" refers to continued readjustments in a listing’s price to catch up to changing market evaluations as comparable sales prices continue to move downward. The issue with this phenomenon for Sellers is that if a Seller waits too long to readjust to a supported current price point, the interested buyer audience has already moved on to different properties that already met 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 for less, 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 beyond overpricing.
Sellers often think Buyers will consider the price and negotiate even if their price isn’t supported by comparable sales, which is not always the case. Sometimes, we receive a lowball offer considering the asking price, a negotiation comes of it and once in a while, a successful agreement. More often than not however 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 particular property no longer necessarily outweighs the fiscal overview, for the immediate future and long term.
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. More on that to come!
Global and domestic crises have also impacted 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 also 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.
