What is Chasing the Market Down

"Chasing the market down":  What Jacksonville Home Owners need to know

This term has been tossed around more frequently over the last few months.  I've heard sellers use it, buyers, mortgage professionals, and appraisers.  Just what the heck does it mean?

The best definition is an example of what is happening every day in Real Estate during a declining or flat market.   It's happening everywhere and it's definitely happening here in Jacksonville.  Here are the steps as it most often occurs:

1. Real estate agent suggest house price of $280k as comparable sales support that price.
2. Owners insist on $300k.  "Our house is nicer and we've added a _fill in the blank_"
3. 3 months go by, little action after multiple potential buyers look at the home.
4. Real Estate agent tells the owners that the prices are now selling for $265k.
5. Real Estate agent insist on "Setting the market" by pricing the home for $260k
6. Sellers will only agree to drop to $280k, but will not take offers.
7. 5 more months of a few showings.  Other homes continue to sell at $260k - $265k.
8. 11 months in to the marketing of the home for sale, the sellers finally agree to take a offer of $263k.

This example is happening over and over again.  From outside looking in, it's easy to be an armchair quarterback and say they should have priced it for $275 or $280 to begin with and they could have probably sold the home much sooner. Easy to say.

As the owner of a home in Jacksonville, it's not that easy.  The equity, if any,  is their money for the next home.  It's not that easy to let it go.

If you are considering selling your home, take a strong look at the comparable homes that have sold.  Most likely, regardless of the upgrades you have put in and money you've poured in the home, your home isn't worth what it was purchased for in 2005.  It's also not worth what your neighbor sold for in 2006.  Accept the reality, move on.

If you are selling, price it right from the beginning.  In this market, their is low demand - high inventory.  That equates to a full on competition.  Is your home priced right, is it in better condition, is the curb appeal better, does it offer more value for the money compared to the other competing homes?  If you can't say yes to all of these, adjust your price down.

Homes are selling everyday in Jacksonville.  Make sure yours is one of them!