How Buyers in the Metro Phoenix Market React to Homes For Sale

1. Buyers wait to see valueto view and purchase the home.
   1. 9 out of 10 homes sell within 35 days of the list date or the last price reduction date. Remember those 35 days include 3-5 days of negotiation.
   2. Of the homes that sell without reducing their price, over half sell in less than 2 weeks. 
2. When No Buyers visit the home we have a situation with the Brokers/Agents, the Market and most importantly the Buyers have rejected the price.
   1. This home is at Over Priced by 5% or More.
3. What about unique homes that take the “Special Buyer.” 
   1. Even a unique home will attract viewers/buyers, when it is priced at or near market value. Buyers will be attracted by the home being priced at market.
   2. The feedback will consistently point to the buyer’s rejection based on the unique quality. But they will come.
4. What about with a home in a very seasonal area, and there are no showings.
   1. First, market value in a seasonal area may decrease during the off season. 
   2. There are always buyers looking, even in the off season.
   3. A market priced seasonal property(remember #1) will attract showings, buyers may send their Realtor. But if value is perceived, they will go. Even in the off season. That is why homes sell year round everywhere.
5. When 1-2 buyers view a home per week, and the feedback is negative or without interest.
   1. The home is closer to market value, maybe over priced by 3%.
   2. A price reduction will help the home sell at a higher price. Leaving the price will yield a lower price.
6. When 3-5 buyers view a home per week, the feedback is negative or 2nd choice and the home is priced 21+ days at this price.
   1. The home is close to proper price but still high.
   2. A price reduction of 1-2% will help the home sell at a higher price.
7. When a home has strong showings and is not unique but does not sell after 35 days, and the feedback does not show buyers close.
   1. When a home has strong showings and is not unique but does not sell after 35 days, and the feedback does not show buyers close.

We know from tracking the market and experience we can expect a home to sell at:

1.  100-103% of Market Value, when priced at or below 100% of Market Value
2.  100% of Market Value, when priced or reduced to 100-103% of Market Value
3. 98-99% of Market Value, when originally prided 105%+ and waiting 90+ days to price at C. Or Waiting for the market value in the area to increase and offset overpriced home.
4. 95-97% of Market Value, not reducing to near market value and waiting 90-180 days to find a buyer.

Why Does the Market Respond as above?

• • When priced at or below market value, many buyers will see the value and bring offers. This will create an emotional increase in value.
  • When a home is priced slightly above market value or they quickly reduce to this point, buyers will be attracted but there will be no emotional valuation.
  • Once a home is on the market over 90 days, there is a stigmatism to a property. A buyer will not pay market value unless confronted with another buyer in competition for the property.
  • Whenever a home takes 90, 180 or more days on the market and it sells without lowering the price we have a market in appreciation. Although the seller got their price, they would have sold at a high price if they were a new listing at this time. ie. List at $300,000 and sell for $297,000 after 180 days, if you would have listed a week before the offer came at the same price there is a greater probability the home would sell at $300-$305,000. The emotional play of being priced at market is offset by the long term on the market.

Over my career, I have seen many instances where as this last example. A home is on the market forever. No one wants it. It is stigmatized. They finally lower the price or the market catches up to the list price. The stigmatism still pushes buyers away. Then, it sells. Then EVERYONE wants it, because they realize the market at passed it up. They were fooled by the long term on the market. In this case the Seller loses, by selling at a much lower price. If a buyer is unwilling to lower a price and is 5% or more over the market they are better off waiting. I mean take the home off the market, wait for the market to appreciate and put the home back on the market. This action will yield a seller 1-5% more in sales price.