Pricing your home for the present

As the summer eases into fall, overall home sales have cooled in comparison to the spring and summer. The market has shifted, and it would be easy to chalk this up to a weakened market or natural seasonal variation. 

But when you look more closely at the sales numbers, two patterns become clear: One segment of the local real estate market continues its breakneck pace while another is showing signs of a slowdown. 

But it all depends on the price point.

Homes priced between $400,000 to $1 million are still moving fast — getting snapped up after only a few days on the market and receiving multiple offers. Many are selling for more than the asking price. It’s the most popular market segment, so there are more active and motivated buyers and increased competition for the available homes.

However, the data tells a different story in the upper end of the market — in homes over $1 million, but especially over the $2 million mark. The inventory — the number of homes for sale — is steady, and these homes are staying on the market for a much longer period of time than we saw just this past spring.

Look forward, not back

The biggest challenge in selling a luxury home, one priced over the $2 million mark, is pricing it right. Any other advice that might apply to lower-priced homes isn’t really useful in this segment. Projects like sprucing up the gardens or repainting the front door won’t cut it. Let’s face it: At this level of luxury, almost every home is in great shape, with a spectacular view, beautiful grounds or both.

But these luxury homes aren’t selling as quickly as they were last spring. Quite simply, it’s because many of these sellers are pricing their homes as if it’s last spring. Times have changed. If you’re selling a luxury home, you have to map the data to today’s market and price it accordingly. If you don’t, you’ll likely be on the market for 100 days or more.

Many brokers and industry observers say the last stretch of the year is always slower for home sales. They’ll tell you the kids are back in school, the holidays come fast and furiously, and people just aren’t looking for homes. But the market doesn’t come to a screeching halt just because the leaves have browned. 

Luxury buyers are out there — there aren’t as many of them, but those who are out are active and serious. These buyers are savvy, educated on our neighborhoods, and can afford to be patient. I have luxury buyers waiting on the sidelines, with their checkbooks in their pockets, ready to pounce when they find the right home at the right price. 

In looking back at my own data, I’ve had many of my highest-priced closings in the fourth quarter of the year. Rather than focusing on the season, I focus on where the current trends are. This will help point to where we should spend our time.

Selling in the now

If you’re getting ready to sell your house, your success and experience is going to vary widely depending on the market segment you’re in. Houses on the market below $1 million continue to get multiple offers with few contingencies, while often selling at the asking price or above.

If you’re selling a home priced above $2 million, price your home competitively based only on what’s happening now, not what happened six or 12 months ago. Luxury home sellers have more competition; buyers of luxury homes have less. Remember this, because they’re going to expect to negotiate almost everything from price, to contingencies, to the settlement date.

So while the late summer did see a somewhat slower pace on the higher end of the market, the buyers who are looking at luxury properties are still active. The property that’s priced right will sell much more easily than one stuck with last spring’s price.

CHRIS SUDORE is the managing broker of King County Estates. Write him at Chris@KingCountyEstates.com.