Salt Lake City’s strong real estate market is a seller’s dream. Tight inventories and appreciating prices mean sellers can usually find a buyer quickly and at a premium price.
But real estate markets are cyclical. What goes up eventually comes down–and vice versa. Sellers often try to time their entry into the market based on these cycles. If you happen to be fortunate enough to list your property during a strong market, it’s important to be realistic about your expectations and to understand the potential downsides.
Filter the media hype and know that while some homes may be getting snatched up instantly, it doesn’t happen across the board. There are other factors involved, including price, condition of the property and location. Sometimes sellers overly inflate the price in a super-hot market, ultimately turning off prospective buyers.
That said, if you’re in no hurry to sell the home and you believe the market will continue to be strong, price it aggressively and then have patience. However, there is, of course, a risk. The market could correct itself while the “for sale” sign is still in the yard. Be especially careful in an overheated market. If it’s to the point where there are bidding wars or an extreme shortage of inventory despite skyrocketing prices, you could be in an overheated market that is about to correct.
When a strong market turns due to economic conditions, there’s usually a lag time before prices adjust because people are hesitant to accept that the boom is over. Recognizing and responding to even a slight downturn is critical so the seller can adjust the price or accept a lower offer.
Another drawback to pricing high and waiting is the “what’s wrong with that house” syndrome. Most buyers have agents who will tell them how long a listing has been languishing on the market. They won’t see it as a pricing strategy; they’ll see it as less desirable. Aka, it’s worth less. Homes that linger on the market average a lower sales price to list price than those priced correctly on day one.
The downside to selling in a strong market is that if you’re looking to upgrade to a larger home, you too, will pay a premium price. It can wind up being a wash in terms of how much you actually gain. One scenario that works well if you need more room, is to sell in a hot area, such as Sugar House or the Avenues, then buy in an area with lower prices per square foot. This option means leaving your neighborhood however, not something everyone wants to do.
The best advice is to exercise logic, be reasonable, and don’t get caught up in the frenzy of fear and excitement that often leads to poor judgment. Sell and buy based on needs rather than speculation, and you’ll be on stronger ground. An experienced Realtor® can help you analyze the market and explore your options.
To summarize, no matter the market, the key is to price your home right from day one, especially if the market is overheated.
If you have question about the value of your home, call today. We’re happy to help…no strings attached!