As Market Rebounds, Overpriced Listings Return
We are starting to see a resurgence of overpriced listings, not just in Playa Vista, but everywhere. Back in the good ol’ days, (2000-2005), people would overprice their homes and buyer’s would get in line to pay. Who could blame them? It was what the market would bear. Buyers who purchased to the end of that period, may not see it as the good ol’ days, but that’s ancient history.
In the recession era (2006-2011), things slowed down dramatically. Lack of consumer confidence combined with non-affordability/difficulty obtaining credit, marked this period and sellers who priced their homes higher than the already overinflated market, could not sell. It can be argued that there were very few realistic sellers who overpriced their homes, especially toward late in that period. With nothing but negative economic news (negative being a kind word), sellers who needed to sell knew it was going to be painful and mostly took their medicine (possibly in the form of short sale) without much complaint.
Now, we are entering a new period of price increases due to more favorable economic conditions creating demand combined with less supply than any time in the past 6 years. This can be treated by sellers as a.) an opportunity to sell for a little more than last year, do so quickly, and dictate the terms of the sale because it is a “seller’s market”, or b.) be delusionally greedy hoping a buyer who wants to buy their place badly enough will bite and price their home 15-25% above comps, pretending the majority of the declines from the past 5 years could be reversed instantly.
There is very little inventory in Playa Vista and approximately one third of active listings are priced at least 15% above comps by sellers whose motivation is unclear, however what is clear is that the listings are not moving. If a seller truly wants to sell, they are doing themselves a disservice to price a home this high, especially with still jittery, value-conscious consumers and even more jittery and value-conscious appraisers. Additionally, you don’t get a second chance to make a first impression.
A professional real estate agent who takes a listing like this either doesn’t know the market, hopes a for-sale sign will get them buyer leads to whom they can show non-overpriced properties, is hoping for a price reduction down the road, or is praying someone will bite. The last scenario is least likely to happen, so a professional agent who doesn’t advise the seller that a listing is overpriced, even if he/she is willing to market an overpriced listing, is not acting in the fiduciary best interests of their client.