Your home is unique and well cared for. You know what it’s worth…. or do you? The fact is that your home is only worth what someone will pay for it, and that is always changing. The value of your home is directly linked to your current local real estate market. That’s why it’s so important to know what the market conditions.
A Comparable Market Analysis (CMA) is a report that lists comparable homes for sale and recently sold ones in your area as well as their prices and days on market. But that’s not all you need to know to choose the right listing price. You need to know the market’s appetite for your home, and that can only come from an overview of your community’s current market conditions. Market conditions are like a weather report; it helps you predict what the current crop of buyers will do. Using this knowledge, you can price your home to sell quickly, and for the most money possible.
Selling your home quickly is very important. The right price generates a bumper crop of buyers. If you price your home too high compared to other similar homes, you’ll appear to be testing the market. Buyers will assume that you’re going to be too difficult in negotiations. The longer your house sits on the market, the more buyers will think there is something wrong with it. The buzz around a new property only lasts 2 weeks at best. This can escalate quickly into decreasing the value of your home (valuing it at less than it should be or would be if you had priced it right in the first place).
Market conditions are formed by buyer attitudes, made hot or cold by jobs, incomes, mortgage interest rates, and overall consumer confidence.
- A seller’s market is characterized by confident buyers, short “days on market” and low inventory levels of less than six months on hand. This usually results in rising prices.
- A buyer’s market is characterized by longer “days on market,” and high inventory levels of seven months’ supply or more. To get buyers to come in from out of the storm, sellers must offer incentives such as seller-paid closing costs or lower prices.
The market conditions will tell you the long and short-term trends. If the market is heating up, you can ask a little more for your home. If the market is cooling, you may need to price your home slightly under the market in order to attract more buyers.
One thing you absolutely should never do is ignore market conditions. It’s said the market is always right. If you price your home too high, you’ll know when you get few to no showings. For a current CMA of your local market, call Helen today at 847.967.0022 or email [email protected].