2018 Case Study #2: Low Supply
Here is another way that prices up. In this case, the price increase results from scarcity!
Pictured here is a condo complex with two units, each very unique, one larger unit and one smaller unit, each designed with a special flair and a totally unconventional layout, one brand new, one a near total renovation. When I looked for comparable sales to establish a good asking price, I found virtually nothing. So when I listed them in the winter of 2017-8, it was the seller who set the price. He didn’t even ask my opinion!! He believed he had something special and he was willing to wait for the right buyer. He priced them both way high!!
There is time for realtors to give advice, and there is a time to shut up. I was as patient as I could possibly be, as we showed and showed and showed, and the seller turned down offer after offer, and discouraged everyone by refusing to negotiate. Finally, a buyer appeared for the big unit. She saw it 3 times. Then she withdrew and went off to buy something else. Then a month later, she came back for a 4th visit. Her broker said to me: your asking price is way too high. I said: it is what it is. Eventually, the Seller came down a little bit, and the Buyer paid a very handsome price, because she loved it.
The smaller unit had at least 5 bidders who absolutely loved the layout. Their offers were rejected. The seller made a couple of modest price reductions, but then a buyer stepped up and paid full asking price.
To be very honest, the properties sold for much higher than I would have guessed, and it’s because the property was unique and the seller was willing to hold out for top dollar.
In my last post, I showed you a conventional house where high demand pushed the price up. In the case of the two unique condos, it was a scarcity of supply.
Call or email me anytime!! The summer and fall markets are often completely different.