The real estate market has been booming for quite some time, with many buyers willing to pay above the asking price for a property. Now, the trend seems to be reversing itself, and many Florida home sellers are slashing prices on their real estate. — Andrew Shader explains why this phenomenon is occurring in the Florida market.
For the past year, available properties have been snatched off the market quickly by buyers eagerly looking to relocate. In many cases, these homebuyers were willing to pay above the asking price.
Due to soaring demand, sellers put their homes on the market at much higher rates. However, since demand has declined a bit, many homeowners are now realizing that they have set the sale price of their house too high, and properties are lingering on the market for a long period of time with no activity or interest. Sellers are being forced to lower their expectations and cut the prices of their real estate.
While it may initially seem like price reduction is a negative thing for sellers, Andrew Shader explains that it may not be all bad. When the price of a property drops, it opens the door to more prospective buyers for whom the property may have initially been over budget. This gives sellers a great opportunity to get their house in front of more people.
When there are more buyers expressing interest in a particular property, one may end up falling in love with it despite the price tag. In turn, this can lead to bidding wars that could potentially bring the price back up to its pre-markdown number.
Houses that are appropriately priced from the beginning are likely to sell faster than those with inflated price tags. This is likely welcome news for sellers who have been sitting on an overpriced property for weeks or even months.
Despite the trend of falling home prices, many Florida sellers will be pleased to know that the real estate market is still thriving. Houses are still selling at unprecedented rates and for record amounts of money.
If the price of a home must be cut, it can simply mean more opportunities to get in front of new buyers who would have been excluded at a higher price point. Sellers should consider fair market value when pricing homes to ensure that they line up with the rest of the market.
About Andrew Shader
Andrew Shader is a real estate investor, developer, and entrepreneur based out of Fort Lauderdale. Shader started as an entrepreneur in the insurance industry before discovering his real estate passion: finding scalability in any vertical. Andrew's real estate strategy specializes in finding value-added properties and increasing their property value by upwards of 60% — without needing to rely on future appreciation.
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