Real Estate Market Update: The Value of Home Pricing
- August 26, 2017
Driving around certain areas of the United States, you’ll find that many of the For Sale signs outside of homes are experiencing a pricing trend: Homes are being put on the market for one price and then a reduction in price follows shortly thereafter. Is this the state of the economy, or are we looking at a pricing faux pas?
Prices are Dropping… But Why?
According to a Trulia report, more than 14 percent of homes in Dallas TX currently have a reduced price sign and price cuts have risen about 3 percent compared to 2016. These trends extend to major metropolitan areas throughout the country, including San Jose CA, San Francisco CA, Portland OR, Raleigh NC, and many others. What’s interesting about this is that the real estate market is in a unique phase of its cycle, where home prices have been increasing for so long that sellers aren’t sure which price is going to give them the best return for their investment. This leads to an increase in initial home pricing, with sellers hoping the market will continue to thrive. The only problem with that course of action is that the same inventory increases and economical changes that have been plaguing the real estate market for months halt any possible pricing accelerations in the near future and lead buyers to reduce their asking prices to get their homes sold.
Home Prices and Real Estate Market Choices
The increase percentage of home price reductions shouldn’t make you throw in the proverbial towel just yet. When combined with the right market, these reductions offer unique opportunities for sales professionals to achieve their sales numbers by passing along the opportunity to their clients. Let’s use the real estate market in Dallas Texas as an example. This housing market is experiencing the highest percentage of pricing reductions in the United States, but according to a Best Places to Invest in 2017 report from Forbes and Local Market Monitor, home prices in this area are expected to grow the most of any city listed. Statistics like the 6.2 percent three-year population growth, 3.9 percent job gains in 2016, and 9 percent annual home price gains in Dallas TX support a growing market and industry numbers show that homes in this city are undervalued compared to historic averages and local income. The same can be said for Fort Worth, Texas, which also made Forbes list of the Best Places to Invest in 2017. In Fort Worth TX, home prices gained 9 percent in 2016, job growth showed a 2.3 percent increase, and its population increased by 5.2 percent from 2012 to 2015.
Going through all of the numbers illustrates the upside to this for buyers: Many major U.S. cities have solid home markets where population, jobs, and home prices are growing and a great purchase of a price reduced home in 2017 can yield a profit when 2020 comes around. Perfecting your sales strategies for markets in these specific conditions is vital for achieving sales success. Your clients are counting on you to provide the information necessary for them to find a dream home for the best price, the best value, and the best longterm investment.
At Sales Solve Everything, our new home sales trainers can provide the tools you need to bridge the gap between current real estate markets and your clients’ paths to new home ownership. Our customized programs, online training, and schools and workshops are designed to make sense of your real estate market and refine your sales strategies to not only accomplish your sales goals, but surpass them.
Contact us to learn more about our new home sales training programs.