Is it logical for a buyer to want 10% off of a "fair" asking price in today's economy?


Is it logical for a buyer to want 10% off of a "fair" asking price in today's economy?
By Scott Rogers • November 28, 2009
Keston recently commented here as follows: That is a conundrum. In the early and mid 2000s sellers believed they should ramp up their prices relative to recent comps (usually with a successful sale) - hence, the upward pricing pressures on housing. Now, the opposite situation is occurring; buyers believe they should get a better deal than current comps. Indeed, even if prices haven't come down much, buyers have progressively gotten better deals in the last two years (i.e., lower interest rates and first-time buyer incentives). In the near term buyers are either going to require a good deal now or wait for a better deal. Remember that housing increased over 10% a year in the boom times. It's not illogical for a buyer to want 10% off of a "fair" asking price in today's economy. I can follow Keston's logic --- if prices went up 10% per year (or more) as the housing market accelerated, why shouldn't prices go down 10% per year (or more) as the housing market decelerates?!! Here are my thoughts: First, I definitely agree with Keston that it is very logical for a buyer to want 10% off a fair asking price. Furthermore, I imagine those logical buyers are quite perplexed (and perhaps frustrated) that prices haven't fallen by 10% a year as the market has declined. The law of supply and demand definitely suggests that prices should have adjusted as demand so drastically declined over the past three years. But, given that prices haven't fallen in this area, let's examine what is likely happening as those logical buyers try to buy in our local market with the perspective that they ought to be able to negotiate 10% off an asking price. The the past three months, 224 residential properties have sold in Harrisonburg and Rockingham County. These 224 properties sold, on average, for 96.37% of their asking price. Thus, on average, buyers only negotiated 3.63% off the asking price. Of the 224 properties, only 19 properties (8.5%) sold at a price of at least 10% below their asking price. Of the 224 properties, only 5 properties (2.2%) sold at a price of at least 15% below their asking price. So, what's a logical buyer to do? There is nothing wrong with wanting to negotiate 10% off an asking price, or with making offers given such logic. But such a buyer should know that they may have to make an offer on ten or more properties before they find a seller willing to negotiate 10% or more below their asking price. Receive Updates by Email Recent Articles: Is There A Price You WOULD Pay For This House? There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
Comments (1) or Subscribe