For my second showings I pulled the Property History on each and the Tax Records (previous recorded sales price) for the two places my clients and I plan on taking a run at. It was while doing this exercise that I noticed what I had been suspecting for some time but hadn't bothered to examine closely--Single Family Home and Condominium List prices have moved very little in the past 24 months. And while Market Time has been lingering across the board during this same period, price reductions have been minimal and price slashing has been almost nonexistent. And my Conclusion: No Real Estate Bubble here....just some overpriced listings taken by some well intentioned but 'hot air' listing agents.
I am of the opinion that most overpriced listings have less to do with the actual market than the experience and savvy of the listing agent filling out the paperwork. Thousands of newly licensed agents have hit the streets in and around Chicagoland these past few years and many have taken listings that more experienced agents would pass on. And its not just the newbys. In a crowded industry such as this its very difficult to pass up any opportunity to work for a client. But it does not do the seller justice at all to list a property two pricepoints above correct market value. I've done it. It's painful. Nobody gets happy. (I define correct market value as a price that generates 10 showings a month minimum/3 months on the market maximum for an offer) This applies almost exclusively to the Residential Resale inventory. New Construction has its own set of parameters to examine and will be written about at another sitting.
The new (or just plain unsavvy) agent doesn't realize what happens when a property is listed at the wrong pricepoint. To begin with, the property is consistently the worse example of any showing line-up, market time accumulates like interest on a juice loan, and expectations of a timely sale with premium profits diminish with each passing week/month/quarter. And when the inevitable price reduction finally does come, (often times on the clock of the newly hired listing agent) everyone is screaming 'Bubble!' when in fact, it was just a little 'hot air' correction.
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