The house across the street from me is on its fifth listing in 15 months. It’s a well-built home with rare features for our area: front and back yards, a spacious layout, high-end finishes, a garage and parking for at least four cars. I knew the original owners who built it, and it has always stood out as a gem in the neighborhood.
The current owner, only the third since it was built, purchased it during the pandemic as a second home. He has tried running it as a short-term rental while simultaneously trying to sell it. Yet here we are, 15 months and five listings later, and it still hasn’t sold.
Why? One word: price.
The owner, eager to capitalize on perceived market trends, has continuously priced the home far above its actual value. He frequently references online valuation sites to justify his decisions, but those tools are only a starting point. They lack the nuance of local market dynamics and should always be refined by an experienced real estate agent who understands the area. Adding to the challenge, he has opted for off-mountain representation. While there are many capable agents outside our area, a local advocate with deep market knowledge and relationships can often make the difference in securing showings and offers – especially at a higher price point.
Pricing a home isn’t just about wishful thinking or online estimates; it’s about understanding local market conditions and the financial reality of potential buyers. For instance, to qualify for a $650,000 mortgage, a buyer typically needs an annual income between $160,000 and $215,000, depending on factors like their down payment, credit score and overall financial health. This is a general range, but it highlights a key question: How many buyers in our market are even capable of affording this home
Even if a buyer’s income is sufficient, lenders will scrutinize their debt-to-income ratio (DTI). The most common guideline, known as the 28/36 rule, dictates that a buyer’s monthly housing payment should not exceed 28 percent of their gross income, and their total debt – including the mortgage – should remain under 36 percent. This means that even a qualified household could see their loan denied if their debt levels are too high.
I understand the temptation to price high. Every home seller wants to maximize their return, especially in a challenging economy. But here’s the hard truth: If your home isn’t getting showings or is being shown repeatedly without offers, the issue is almost always the price. In today’s market, buyers are more financially cautious, and homes priced beyond their perceived value simply won’t attract offers.
If you truly want to sell your home, it’s time for an honest conversation about pricing. Base your strategy on comparable sales and active listings, not just your aspirations. Numbers don’t lie and chasing an unrealistic price will only prolong your frustration. A well-priced home attracts the right buyers and leads to successful closings. Greed, on the other hand, will leave your house sitting on the market, no matter how perfect it is.
If you’d like to learn more about the current local market conditions, reach out to Theresa Grant, Real Estate Broker (DRE #01202881), at Theresa@HomesInLakeArrowhead.com. You can also follow on social – Instagram: @theresagrantrealtor|YouTube: @theresagrantrealtor. Theresa is a Broker Associate with Coldwell Banker Sky Ridge Realty.
0 Comments