One of the interesting phenomenons in today’s Ann Arbor real estate market is the variation in sales prices. In the same neighborhoods, you will see one home sell way above the average, while most of the homes are selling for the average price or below. I’ve observed this several times, and really started to analyze what was happening, and in the process I learned a lot about human nature.
Distressed Ann Arbor Home Sellers!
Pricing Your Ann Arbor Home Ahead of the Market
In the current Ann Arbor real estate market it is so important that your home for sale is priced ahead of the market. This is a very difficult concept for many Washtenaw County home sellers to understand. I’ve always prided myself in providing sellers with data and market stats that would make an economics professor proud and I’ve always done my homework when it comes to preparing the market comparables – both active and solds. What I started to notice was in spite of all my market stats and perfect comparables, many sellers were having a difficult time comprehending how supply and demand can greatly affect the price they will get for their home.
To help them understand supply and demand I share the following story with them:
Three attorneys are getting ready to take their Bar exam. Anyone who has had a friend take the Bar exam, knows how important this exam is. Students will often study many months to prepare for this exam, so you don’t want to miss the opportunity to pass the test. As the 3 law students are ready to enter the exam room, they all realize that they forgot to bring a pen. In total panic, they start asking around if anyone has an extra pen. One of the ushers has an extra pen, so he offers it to the first law student for $1. Immediately the second law student offers $5 for the pen. In desperation, the 3rd law student offers $25 for the pen, and he walks into the exam room, and the other 2 law students are out of luck. Continue reading
Over the past several months, we’ve been receiving more and more calls from home owners wanting to shrink their living standards, including their Ann Arbor homes. Of course in the supply and demand scenario, if there are more people wanting to downsize than people who want to upsize, you run into a situation where the supply exceeds the demand and that places a lot of pressure on home prices.