Investor · Lahaina, HI · Member since 2012 · 47 posts · 35 votes
Anyone with tried and tested selling strategies especially in the frothier, over-bought residential RE markets such as California and Hawaii?
All indicators point to a cooling market so current sellers have probably missed the bidding war frenzies. The question is how to optimize selling in order to capture some of the eroding gains. Price is an obvious answer, but how do you pitch a price when comps are lagging indicators in a market that is turning, or has already turned the corner? If you shoot for the top and slowly reduce price to generate interest, you'll look like a distressed sale and the danger is buyers will wait you out. The other extreme is to list well below comps and hope prices are bid up, but that could backfire and trap you in the lower bound range. Picking a price point lower than the frothy comps, but higher than pre-froth comps seems like a good compromise. I just wondered is any sellers/investors have clear strategies for selling in markets that are showing clear signs of cooling. Upgrades, incentives, marketing, etc.
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
4y
@Victor Saumarez - we close about 10-12 deals monthly, but I see quite a few more deals, in particular properties I/we have written offers on and did not get. The market is slowing, but not slow - we are still in an very hot market by any standard!
The difference is that we see now 3-5 offers instead of 10-20+ on a great listing. And Milwaukee has never been as crazy as CA. And while in spring every junky property sold no matter what, buyers have gotten more choosy, we see now listings that are in poor condition or flat out overprized just sit, eventually drop price. You have to be realistic about the condition of your property - so many sellers think that their's is "special" - grave mistake. Generally we expect prices to continue to go up, but on a much slower pace than the last 2 years.
When you look at your comps, eliminate the outliers, look for the middle cluster and the price yourself on the low end of that cluster. If you have a nice listing that will still result in multiple offers over asking price.
Investor · Lahaina, HI · Member since 2012 · 47 posts · 35 votes
4y
Thanks Marcus. We have no middle ground. It went from high but sustained to irrational and mad. I guess it's a question of trying to create that middle ground in order to capture a little of what's left of the madness.