Condo Quandary? What's with the Market?
Real estate in DC this year has offered some serious head scratchers. On one hand, a house that is adequately prepared and priced well is selling in a matter of days, and usually above the asking price. On the other hand, condo inventory is lingering on the market far longer than houses, and there is more likely to be a price reduction on a condo versus a house.
Of the 336 condos that sold in May of this year, the average price was $537,000. These homes were on the market for about 25 days before going under contract, and sold retaining nearly 100 percent of their original asking price to sell.
Conversely, the 319 condos that sold in September had an average sold price of $495,000, remained on the market for 33 days before going under contract, and sold an average of two percent below their original asking price.
In short, sellers of condo inventory can expect to sell at lower prices, to spend more time on market and to experience a greater price reduction than was seen in the spring.
For one thing, our entire country is distracted by next month's presidential election - and we are far more distracted by it in the epicenter. Will the selection of one candidate over the other change the tone of DC's real estate market? Unlikely. But people are holding their breath when it comes to making big decisions to buy their next home. The same phenomenon occurs each year around the holiday season. Consumers are distracted.
Another major factor is the emergence of new condo construction - which is widespread.
The running joke around town is that DC's state bird is the crane. It often needs clarification that specifically, our state bird is the construction crane.
The large numbers of new-build construction - where the product is shiny and new, and often comes with incentives and perks - outcompetes what Joe and Sally Resale can offer. See the two articles about new construction in News & Trends below!
So what can be done?
Be aggressive on price and preparation. Make it spotless and free of hassles for buyers to recognize and appreciate. And price it below comparable market value to entice buyers. But also be prepared for the price reductions, because they're a reality in this market today.
Where the softening of the condo market may not sound like great news for sellers, it certainly is a benefit to buyers. And it takes the two - buyer and seller - to tango.
If information is power, my mission is to help create the most powerful consumers of real estate on the market!