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Raise the Roof!

Posted October 10, 2009 by Matthew Denton

Is it time to raise asking prices?

Has the property market recovered enough that there’s a need to raise property prices as early as now?  The Real Deal writes, “…While a significant portion of listings—roughly 33 percent, according to Streeteasy.com—saw price cuts last month, there was an increase in sales and many brokers started elevating asking prices to enhance their units’ image, to leave room for haggling or because they thought the market was turning around.

Upwards of 850 homes in Manhattan sold in August, according to figures compiled by The Real Deal using Streeteasy.com data, up from approximately 760 deals made a month prior.  Almost 5 percent of all Manhattan homes on the market last month, the data shows, saw price increases; those price changes averaged 6.4 percent.”

Here’s advice to sellers seeking a recovery: Not so fast, folks.

The trend they observed is premature.  Five percent of homes have increased their prices in Manhattan?  That can’t influence the entire spectrum, even in the next quarter.

Also, sellers are just riding the small bandwagon of value hikes, probably swayed by recent reports of slow market recovery.  Please acquaint yourselves with the Case-Shiller Indices, people.

We suspect these increases are just a leeway to adjust when buyers begin to haggle.  In the end, prices will go back to true levels.  We can surmise, therefore, that the rise in prices is just artificial.

There’s no point in raising the price when it will work against the seller.  Remember, not all potential buyers will include you in their options if you don’t fit in their price affordability range.  So what’s the point of rebelling against real trends?

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