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I just got done reading an article in the Chicago Tribune’s New Home Guide, which I found very interesting. While I wasn’t surprised at the results of the article, I was impressed that there is now research and evidence to prove that testing the market with a higher asking price, rather than at market value, will not only take longer to sell, but that it will actually sell below the median asking price for similar homes in the neighborhood.

Jeffrey Otteau is the president of Otteau Valuation Group which offers various real estate appraisal, litigation, and consulting services in New Jersey. After taking a few minutes to explore the company website, it’s quite clear that they know what is happening in real estate all over the country.

In a quote from the New Home Guide Jeffrey says, “Houses that are priced right are selling. Overpricing extends days on the market and guarantees that you will sell your home for less in a declining market.”

The key to his statement is “in a declining market"…

Many analyst’s are predicting that home values and sales prices will continue to drop throughout 2008. In a market like this, holding out for a better price may take you well in to 2009 before the decline in values can even plateau, let alone… begin to rebound.

There is also the stigma of high market times associated with listings that have been on the market for a long time. Consumers assume the sellers are desperate to sell… which leads to “low-ball” offers.

The market we are experiencing now is a result of the gold-rush days of real estate. The extremely low interest rates, which not only increased consumers consumers confidence; it increased the amount consumers could afford to pay for a mortgage, and has left many homeowners with the misconception that this is only a temporary problem.

On a similar note, while consumers were then able to afford to finance a higher mortgage, the price of the homes appreciated at a rate drastically skewed from the traditional rate of appreciation of 3-5% per year , well into the double digits in some areas especially Plainfield IL.

The “shake-out” we are experiencing now will give way to a more realistic real estate climate over the next several years.

The truth is, over-pricing real estate in Plainfield and Naperville IL to “test the market” will end up biting you in the end.

To quote Jeffrey Otteau again, “Everything’s a function of price.”

The upside? If you sell low, you’ll also be buying low when you purchase your next home. So depending on how long you’ve owned your home, it could really be a wash depending on what your intentions are for your next purchase, with all things being relative

If you want to know what your Plainfield or Naperville IL home is worth, call me at 630-673-6233, or fill out the form at the top of this page! 

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Julie Ferenzi | Realtor®
Plainfield and Naperville IL Homes
630-673-6233