Sellers balk at reducing listing prices, but yield to the softer market at the closing table. (By Raul Elizalde, 5/07)

It is becoming more and more clear to sellers of homes in Sarasota that the only way to bring traffic to their properties is to price them realistically. Since many sellers are still priced too high for the current market, properties that are priced correctly stand out and get more showings than their overpriced counterparts.

On the other hand, buyers, who are becoming aware of having the upper hand, tend to make offers at significant discounts from whatever the listing price may be, sometimes regardless of whether or not the property in play was priced correctly.

What is a seller to do, then? Price the home low to bring traffic but open the door to unreasonably low offers, or price the home high to leave a hopeful cushion but sacrifice the traffic? This is a tough dilemma.

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Should buyers wait for further price drops? Signs of a bottom are near, and it’s all about psychology. Read on.
(By Raul Elizalde, 4/07)

In my November 2006 newsletter (Listing Price vs. Selling Price, November 2006 ) I looked at a common measure of the market: the ratio of Selling Price to Listing Price (SP/LP), which is reported to be around 90% for single family homes in Sarasota. The November article explained that the number is somewhat misleading, because the ratio is defined on the basis of the last listing price before a property goes under contract. Any previous price reductions are ignored.

A better measure is the ratio of Selling Price to Original Listing Price (SP/OLP). Using this ratio reveals a clearer picture of the market. As prices weaken, reductions become more common and the ratio SP/OLP decreases. Also, even without intervening price reductions, sellers become more willing to take low offers and settle for less.

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