Unsold properties often overpriced

Source: Property Data Solutions | 19/05/2009

PriceFinder Research Director, Kent Lardner, has conducted a new analysis of properties yet to be sold and still listed on the market after 100 days. New estimated prices were then used to calculate how much each listing was over or under priced.

“Our results confirmed that in nearly 90% of cases, the unsold properties had been listed at prices 11% on average above our PriceFinder estimate”, Kent said.

When a property is over priced or stays listed on the market for a long period, interest wanes. Potential buyers will often become suspicious and ignore the listing, or move on to another property that is more realistically priced.

Whilst the total amount of listings on the market and median price has some level of impact on how quickly a property will sell, setting the right listing price is the most important factor.

Another key consideration is how much a market may change over an extended period of time. Other houses that sell whilst a property is currently listed can have a significant impact on the sale price. Likewise, a significant jump in total listings can also place a downward pressure on the price.

Markets with high stock levels appear to be more sensitive to overpricing, as buyers seek out discounted properties. This has an immediate effect on other houses currently on the market, not only lowering prices but changing the expectation of buyers.

Agents and vendors in volatile markets benefit from scheduling regular ‘shoulder-to-shoulder’ price reviews during the campaign.

Source: Property Data Solutions | 21/05/2009

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