Pricing and the state of the market.

In a market where sale prices are increasing the initial list price of a property is not as critical as when the sale prices are decreasing.

In a rising market if a property is overpriced for example 2% and the market increases 8% a year then in 3 months the property should be at market value.

But in a declining market if a property is overpriced by 2% and the market is decreasing by 8% a year then in 3 months the property will be 4% over market price. And the longer it takes to get the property to the right price the more the seller will lose.

The last time we had a falling market was from 1989 to 1992. We saw house prices drop by 30% in that time frame. It was not unusual to see properties chase the market down. A property would be listed a little too high, not sell, lower the price a little, not sell, lower the price a little etc etc. And yet lots of properties sold in that time frame because they were priced right.

There is also lots of talk about market times getting longer. I am going to do a little research and see if properties are selling with the original list price or if they are selling in 30-60 days as a result of a price change. If they are selling after a price change then I feel it should be expressed as something different than market times being longer, perhaps the market being more "price sensitive". I will post again when I get some more research completed.