Tucson Homes - Make Me Move
October 24, 2007
Post Tags: I-Need-This-Much , Last-Year-My-Neighbor-Got , Make-Me-Move , the-american-dream , Tucson-AZ-Real-Estate , Tucson-Home-Prices
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Why Tucson Home Prices are Staying So High
How does a huge supply of homes not translate into lower prices?
This question came through on the Tucson Real Estate in The News that I also author. The short answer; “Because Sellers won’t accept less.” This is true, but lets take a look at some of the reasons the current Tucson Real Estate Market isn’t like any other time before as we continue this series on Tucson Home Prices.
On the Market but Not for Sale - Make Me Move
These are properties that shouldn’t even be listed for sale. They aren’t really for sale, they are available under a Zillow like approach to “Make Me Move” These are properties priced so far over the market they need to have someone willing to pay way more than the home is worth for some totally unknown reason other than this is what I want.
There are other traits to these properties on the market but not for sale.
- No Lockbox
- Schedule appointments (but only at my convenience)
- It is almost never convenient
- Seller refuses to leave the home when it is being shown
There are more but you get the idea why I call them homes on the market but not for sale. All these homes do is inflate the number of active listings and create the perception there is a high inventory of homes available.
Poor Pricing
Besides the “Make Me Move” approach to pricing here are a couple more reasons Asking Prices are so high even with high inventory.
“Last Year My Neighbor Got . . .”
The one most often seen is the asking price is based on “What someone once got in the neighborhood at one time” A variation of this approach is to go around the neighborhood gathering Listing Flyers. “My house is better than any of these so I can ask. . .” But if all the homes on the market in your neighborhood are using this pricing strategy every home will be priced well above the market. Using Asking Prices to determine your asking price just adds more homes to the market but not for sale.
“I Need to Get This Much”
Another pricing plan, “I Need to Get This Much out of It“. It is amazing how many times we hear this one and with point blank honest looks on the faces of a potential seller. The thought appears to has never crossed their mind that it might be worth less than what they “Need to Get”. The look of disbelief on their faces when they find out this is not a valid way to price their home and expect it to sell convinces us many sellers really don’t know what their home is worth.
As mentioned yesterday the American Dream used to be home ownership. You would celebrate when you bought your home. You worked diligently to maintain your home and eventually you would celebrate the “burning of the mortgage”.
Today many people consider the American Dream as using a home to finance a lifestyle. It is their personal ATM machine until they take it away. This is a contributing factor in the “I need to get this much” approach to pricing.
Tomorrow we look at one more contributing factor in high prices in a high inventory market which is exactly where we are now in the Tucson Real Estate Market.
