Sellers have 4 Options in Declining Market
If you're selling your home in a declining market, you have 4 options to consider if your home is not selling:
- Aggressive Pricing: Pricing the property aggressively below competition will drive home the perception of value to prospective purchasers.
- Rent: If you are fortunate enough to own a condo or a co-op with a liberal sublet policy, determine if renting makes financial sense. Consider the time horizon of how long you will be allowed to sublet and where you believe the market may be when that time expires.
- Wait: A seller may decide to take their home off the market and wait for the market to improve. The big question here is just how long will one have to wait for the market to stabilize.
- Foreclosure: No elucidation necessary.
As prices soften in the Manhattan real estate market, sellers must evaluate their current living situation including their financial positions to determine just which of the 4 options above is most appealing to them.
Option 5. Do nothing and HOPE that the market goes back in their direction. Currently, there is a growing amount of such "hope" inventory on the market.
The key word in the first sentence is "selling" which is a verb meaning "to sell." Option 5 is not an option at all.
Thanks for the vocabulary lesson.
If you want to nitpick, I would point out that not everyone who is "selling" a home is successful in the near term. Doing nothing is as much of an option as price/marketing improvements, switching agents, renting, pulling the house off the market and foreclosure. This is especially true if you have a longer time horizon and don't calculate your opportunity costs (as many don't).
How do you classify inventory that is not priced near market but where the seller has an agent and is holding open houses?
"How do you classify inventory that is not priced near market but where the seller has an agent and is holding open houses?"
A waste of time or market clutter, take your pick.
Could not have stated it better myself Reuben.
Anyone who is "selling" is doing just that because they have likely priced properly. For those who "have a longer time horizon," I would strongly recommend an aggressive price adjustment rather than "hope." Just my professional opinion.
... and that is the point. A huge number of sellers are now choosing to do nothing with their listing (with all the implicit risks), and consequently, the inventory overhang continues to grow.
I think that many would be better off focusing on the profit that are taking... rather than the small paper loss from what they could have gotten a year ago.
Completely agree. Seems we're on the same page after all.
Option 5: Hope
