Home buyers and sellers have always had their share of disagreements, namely on price. It’s inherent to the transaction process: Sellers want to receive top dollar for their home and buyers want to get a good deal.
In today’s world, as we navigate the changing times of COVID-19, there’s an interesting twist in rationale with regard to price. Without question, the pandemic has affected businesses in all industries, including real estate. Many buyers believe that sellers should lower prices because the previous level of demand has decreased in pandemic days. However, the supply of homes on the market was already low before March, 2020. Sellers believe with an even lower supply of homes to choose from, they have good reason to hold firm on their price.
National Survey
The National Association of Realtors® (NAR) conducted a flash survey* of agents across the country, asking the following questions:
1. Have any of your sellers recently reduced their price to attract buyers in this health crisis?
72% said NO.
2. Are home buyers expecting lower prices now?
63% of agents said YES, their clients were expecting a price reduction of at least 5%.
Clearly these are two opposing perspectives in the market. On one hand, surrounding questions about the economy may be influencing buyers to expect lower prices. On the other hand, sellers remain confident that the supply and demand balance continues to tip in their favor.
Cincinnati Perspective
Although this is a different spring market than the norm, people still have individual circumstances that require them to buy and sell real estate. In the Greater Cincinnati area, homes in the high $200,000s and under are experiencing the greatest demand. Move-in ready, updated homes in this pricing tier are frequently receiving multiple offers and selling quickly. Comparatively, homes in higher priced tiers are generally moving slower than in normal spring markets.
If you have questions about pricing as a home seller or a buyer, reach out to Platinum Service Realty for a professional assessment of your area.
*NAR Survey Source: Keeping Current Matters.
Real Estate Term of the Week:
Escalation Clause: Part of a real estate purchase contract that lets a home buyer say “I will pay X price for this home, but if the seller receives another offer that’s higher than mine, I’m willing to increase my offer by Y amount, at a cap of Z price.”