by Flint Adam, Nolensville resident & Realtor®
Monday, July 18, 2016
I get email updates throughout the day via my website’s free email alerts which notify me to changes in the Nolensville real estate market. What’s caught my attention lately are the several updates notifying me about price reductions in town.
Here we are in the thick of real estate season, in an environment where both a lack of inventory and affordable housing are rampant, yet dozens of price reductions are happening?!
I began digging into MLS data and found some interesting information. (Note: for this analysis I looked only at single-family residential re-sale homes within Williamson County Nolensville. I have excluded new construction as price changes often happen as options are added/deleted).
- Since June 1, 2016 (roughly six weeks ago) there have been 48 price reductions on 32 single-family homes.
- Reductions range from around $1,000 to $40,000
- Some Nolensville properties have had 3 to 5 price reductions since June 1.
- Despite the price reductions, only 6 of the above-cited reductions have resulted in a property going under contract.
I compared these numbers with the same time period last year and found that residential re-sale inventory is up about 4.5% year-over-year… but price reductions are up 33%!
And how about this?: since June 1, 2016 there have been 38 resales in Nolensville that have closed, but only 16 of them (42%) sold for asking price.
Are We Reaching A Price Ceiling?
I don’t think we’ve hit the ceiling, but I do think the stratospheric rise in local home prices is nearing an end.
Consider last month’s sales figures that showed a surprising decline in Williamson County’s overall home sales (down 11% year-over-year). The Williamson County Association of Realtors® (WCAR) attributed much of that decline to smaller overall inventory and rising prices, and stated an “expected slowing of sales as we move through the summer months.”
Nolensville is traditionally one of the more price-friendly towns in Williamson County – at least compared to Brentwood and Franklin – and according to WCAR, the largest buyer demand within the county sits around the $460,000 price point. Nolensville’s median sold price-point last month was $459,000… so, shouldn’t our town be running the table on sales right now?
Well, sales here are strong, especially in new construction, but buyers aren’t dumb. The fact that so many existing homes around here are reducing prices or not selling at asking price should tell us something…
Nolensville Home Pricing and Impact on Marketing
Our market has seen a lot of home price appreciation the past couple years, and obviously sellers want to maximize what their home is worth, but it’s still important to correctly price a home to market standards (which have still been really good to sellers,) rather than let greed overwhelm reason and put yourself in a situation where you’re looking at multiple price reductions and more days on market… if not a failed sale.
Missing the price point from the get-go means missing your best marketing opportunity for your home. Consider this graph:
Your home’s greatest showing activity will typically occur during the first three weeks on the market. After that, showings usually begin declining.
Correctly pricing also attracts a larger percentage of buyers during those important first three weeks:
Don’t Be Fooled By Unscrupulous Agents
In the real estate industry there is a term used for agents whose practice is naming high list prices in order to win business… it’s called “buying a listing”.
If your goal is successfully selling your home, then correctly price it from the beginning based on features, condition, and what the marketplace is saying. When you interview an agent, dig in and ask them about their methodology and understanding of the market. If they’re quoted list price is well above what other agents are telling you, ask more questions! Validate a price point instead of simply going along with a sales pitch.
Be Discriminating In Who You Hire
When you’re interviewing agents, get a clear understanding of how they’re pricing your home – understand their methodology and make sure it makes sense. Also, ask what their experience is in your marketplace. Pricing homes in Nolensville can differ from pricing homes in Bellevue.
It’s also an added plus if the agent has earned designations and certifications that speak to experience and knowledge. The best Realtors® out there are Certified Residential Specialists (CRS)… only 4% of all Realtors have earned the designation. Earning it requires a lot of real estate success, experience, and additional education. It’s like a Master’s Degree for real estate.
There’s also the National Association of Realtors’ new certification, Pricing Strategy Advisor (PSA). This involves extra coursework specifically geared toward better understanding home pricing, working with appraisers, and developing a Comparative Market Analysis for clients.
All this is not to say that even experienced/educated agents can’t occasionally miss a price-point, or that market conditions and/or competition may suddenly change and alter a home’s value, but due-diligence and level-headed thinking are two of your best allies when it comes to pricing and marketing a home for sale.
Flint Adam and his family live in Nolensville’s Bent Creek community and he proudly focuses his real estate practice right here in town. Call him today at 615-500-6393 and discuss how he can help solve your real estate buying and selling needs.