Sell High, Buy Low
If you want to get the most for your money as a buyer or seller, please read the following report on specific market conditions to look for that would make selling high and buying low a viable option. Currently most people think it is not a good time to buy because they think it is a seller’s market. That is true in the overall Pierce County situation, but not all sectors or price points are the same. Let us explain how our concept will work to your advantage.
A typical balanced market contains double the number of active to pending sales or in other words a 50 to 60 percent ratio. The data supporting this concept is calculated using the number of homes pending divided by the active listings in the area. Anything over a 60 percent ratio is considered a seller’s market, whereas anything below 50 percent is considered a buyer’s market. Now let’s look at the numbers.
In the current Gig Harbor market, it is possible to sell high and buy low. Right now with a sales price of under $450,000, the general sales ratio for Gig Harbor is 115 percent (60 active listings; 69 pending in the last 180 days according to the NWMLS). This simply means that there are currently more buyers than sellers at this price point, making this an extreme seller’s market. Averaging the 258 homes sold in the last 180 days, 58 percent sold in seven days at 100 percent of list price. None of the 58 percent had a reduction in price. The remaining 42 percent of the 258 homes had one or more price changes before selling, which resulted in 69 days on market and 7.87 percent reduction from the original list price. The market is telling us (using these numbers) that if your home is priced correctly, it should sell within seven days for 100 percent of list price.
On the flip side of selling, the ratios tell us you can potentially buy low if you are upgrading into a home worth over $750,000. The general sales ratio for Gig Harbor homes over $750,000 is only 17 percent (58 active listings; 10 pending in the last 180 days according to the NWMLS). This means that there are currently more listings than buyers can handle, boding well for buyers in this price point. Remember what happens when days on market rise and the home has one or more price reductions? Sales price drops a considerable amount (on average of almost 8 percent). For example, that could mean a potential minimum savings of $60,000 off the original list price of $750,000, or a possible purchase price of $690,000.
Each selective area could have different results, as this is an overall analysis of Gig Harbor and is not neighborhood or house specific. Burk Realty would love to help you if this is a concept you are interested in pursuing.