Kevin Mann, here. I was having a conversation with Zach Goodyear today about what is causing hesitation among some buyers in the marketplace right now. We debated a few ideas and polled the rest of the CityLiving Team to find out what they were seeing and the main objections that seem to come up are:
1. Unrealistic expectations of how much they can negotiate on price
2. A lack of a sense of urgency
3. Financing ability
These are always factors that we see in the buying population, but they definitely increase during uncertain times. I wanted to address these and talk about my opinions on each. I’ll post on these over the next couple days. First up, unrealistic price expectations.
Unrealistic Price Expectations: Let me first say that there are some deals to be had out there. Some sellers are in a tough place and need to get out of their house quickly, and are willing to sell it for a bargain. They are even willing to lose money if that means saving them from possible foreclosure, allowing them to move into a new home, or any number of other reasons. However, these deals are a small percentage of the current inventory and overall houses are still holding their values quite well.
I was doing some research this weekend and found that in houses under $500,000 in Area 2 (Belmont, 12South, West End, Vandy, Green Hills, etc.), Area 3 (Germantown), and Area 6 (East Nashville), the list price to sale price ratio over the last 6 months was at 95% and above. This means that the average amount homes are selling for is only 5% less than the list price. For example, on a $250,000 house, that would only be a $12,500 reduction down to $237,500.