Price is and always will be a core fundamental in a successful real estate transaction. It doesn’t matter if it’s a condo in Miami or a hut in the jungle. If the property is not priced well, it won’t sell.
Our latest figures for Downtown Miami were published last week and I noticed immediately that although the absorption rate still remains steady, the number of homes has still increased since last year by over 18.8% . With the inventory rising significantly, there have been lesser sales at the same time. A balanced market always shows higher sales that match the amount of inventory. Our current market report is not reflecting that.
Some media sources mentioned the delivery of new construction units and the lack of foreign interest as the primary cause to this trend. Many of my colleagues in the area said the same as well. Regardless of whether it’s one or a combination of both, I expect to see this trend continue for the rest of the year throughout Downtown Miami and Brickell unless the prices are corrected on certain listings.
I dug a little deeper just to be thorough and found out that they’re partially right. Nevertheless, I also realized that many Sellers are pricing their home without listening to the market or looking at the latest sales. I checked the numbers on each building and in one instance, one condo was priced for $100,000 more than its last comparable sale. Overpricing units like this often results in units staying on the market for unusually long periods of time, thus creating a trend that could potentially be misleading.
Many like to place the blame on this on the Sellers themselves for not wanting to be reasonable. In my humble opinion, setting the price is a double edged sword and it is also the agent’s responsibility to be upfront with Sellers as well on this topic. In conclusion, agents have to be upfront and Sellers have to be willing to listen to reason. Transparency is a must.
As an agent, I take the extra time when it comes to educating Sellers on this subject. I check all the comparable sales, make the right adjustments, and keep a close eye on any market changes. Most of all, it comes down to setting the right expectations at the very beginning. Not being upfront about this is a textbook example of doing a disservice.
Last but not least, we understand. It may feel like a gamble to not start with a higher sales price. In reality, the gamble is worse. Pricing your condo incorrectly will only cost you valuable time and hurt the prospects of a top dollar sale in the long run. I always recommend taking the extra time on research and analysis prior to discussing anything else about the sale.
Knowledge is everything. The more you understand the better I can help you.
Further Reading On Price
In addition, visit our previous posts on this subject for more valuable tips on setting the right sales price in 2016.
Finally, we can’t forget to send a quick reminder that Downtown Miami apartments are our specialty! If you would like to buy or sell in Downtown Miami, reach us at 305-305-3885 or at email@example.com. Thank you for reading The Miami Observer!