Pricing a home correctly has never been so important.
In a typical, balanced market, it’s ok to look at comparable sales from 3 months ago. Rates probably were the same. Inventory was about the same. You may just need to account for seasonal changes in the market (e.g. a home that sold in November versus one that sold in February).
This isn’t the case now…
Inventory is slowly increasing week by week around Los Angeles.
Three months ago, 30yr fixed rates were about 3.5%. Today we’re seeing around 5.25%.
Let’s look at the payments to cover principal and interest on an $800,000 loan.
In February @ 3.50% = $3,592
Today @ 5.25% = $4,418
As a seller, we want as much money as possible. That means looking at the sale from a buyer’s perspective and understanding their ability to pay more for a home has been altered.
Sellers who are pricing their home and thinking we’re in the same market as early 2022 will unfortunately lose out.
This is why we can see similar homes for sale in the same neighborhood, but one is priced at $1,200,000 and another at $1,060,000.
One of these will sell much faster and for over asking price. The other ($1,200,000) will sit on the market as a stale, overpriced listing – they might get a coupe low ball offers.
Combine the poor pricing strategy with increasing inventory….and it’s not good news for the seller.
Today’s buyers have more homes to choose from and will opt for the well priced homes.
When pricing your home, use the most recent data you can find.
Home sales from 3 months ago are virtually irrelevant if you’re not considering how much someone’s buying power has changed since then.
Curious how much your home is worth in today’s market? Give me a call at 424-303-0582