Driving around town, you might see quite a few "Price Reduced" riders on real estate signs.  Have you ever wondered whether most sellers are holding fast, or reducing their asking price?  Let's take a look....

In Harrisonburg and Rockingham County, there are currently 953 residential properties on the market (single family, townhome, condos) without a contract on them.

In the past 30 days (June 2008), 134 of those properties had a price change (that's 14% of the active inventory).  I'm going to assume most of those were price reductions, although some could have (??) been price increases.  (It isn't possible via our MLS to see en masse whether the prices went up or down).

In the past three months (April, May, June 2008), 293 of these properties had a price change --- that's 31% of the active inventory.

And if we look at all of the listings to see how many have, versus have not EVER had a price change, here's what we find:
    384 listings have had a price change (40%)
    569 listings have NEVER had a price change (60%)

This is rather interesting (in my view), as I suspected that most owners may have reduced their price at some point while it has been on the market.  But in fact, most home sellers (60%) have NEVER reduced their asking price.

Here are some other interesting stats looking at how long properties have been on the market.

Not at all! They are for buyers as well!

First, a CMA is a comparative (or "competitive", depending on who you ask) market analysis --- or, an analysis that compares one property (the "subject property") to other similar properties that have either recently sold, or are on the market. As I explain to my clients, my CMA's attempt to account for all significant aspects and characteristics of a home including square footage, functional space,age, style, condition, and more.

Why would a buyer want a CMA? When making a purchase offer, sometimes buyers determine price based on what they think the seller will accept, or what would be a reasonable offer given the asking price. Ignore the asking price! That's not to say that all offers should be low offers trying to "make a deal", but consider these two examples:

1. House is worth $200,000, but listed at $250,000. Buyers try to negotiate 10% off, and offer $225,000. Negotiations fizzle.
2. House is worth $200,000 and listed at $195,000. Buyers try to negotiate 10% off, and offer $175,500. Another buyer comes along and buys the house for $193,000.

This illustrates the great need for a buyer to understand the segment (location, price, etc) of the market in which they are buying. Once a buyer has settled on a particular property, an great way to provide the buyer a context for making an offer is to perform a CMA, to compare the property to similar, recently sold homes.