Agent Will

Selling a home is not like selling a common commodity.  One ounce of gold is equal to another.  One new Ford F150 fully loaded is equal to another.  One loaf of Wonderbread is equal to another.  This is not the case with homes.  You may argue that one new condo is very similar to another of the same plan, yet they are on different floors so that will affect pricing (even marginally).  Basically, though, one home is not equal to another.  They may have similar layouts, similar finishing, similar age, and similar locations but they are not the same.

Here lies the problem with averages.  Averages report what lies in the middle.  It takes into account all above and all below and spits out a result of what an imaginary unit would be.  When we look at reported sales and see the number go up or down that could have been greatly affected by a new project that came on the market with a lot of units, or maybe a very high priced home sold and that skewed the numbers up.  I remember the month that Living Shangri La came on the market and the average sales price blipped up for that month.  Did that mean that all home prices shot up?  No, it did not.

While benchmarks and averages are easy to report the quality of the units in question can not be graded.  You could have a rundown, burnt-out, former marijuana grow operation sell for $300,000 and a $4,000,000 waterfront palace sell.  Does that mean the average price of homes is $2,100,000?  Yes, it does.  But does that mean that the waterfront place is overpriced or that the grow-op is underpriced?  No, it does not.  Does that mean that the average for all homes is $2,100,000?  No, it does not, because that only reflected the sales of two homes which are polar opposites.

Here’s a prediction.  With mortgage rates low and a lot of buyers out there looking for quality I predict that reported average sales will remain relatively stable. That said, I also predict a drop in prices when measured for quality.  I believe we will see sales remain relatively stable with an increase in listings and available supply.  This means that prices may actually drop but that the amount of money buyers will spend will remain the same.  Huh?  Prices will drop but prices will stay the same?  Yes.  What buyers will be buying is greater quality.  You will not see this reflected in the Average of Averages.  You will see this reflected in a specific and localised analysis.  Chipboard counters will be passed over in favour of granite.  Old appliances will be skipped for new ones.  Cheap laminate will be shunned for real hardwood.  No landscaping will be denied when presented beautiful landscaping.  Replace a roof and do renos on possession will no longer be acceptable.  Basically, all those dream items that buyers once compromised on will no longer be compromised and will be demanded.

So the reported sales dollar figure will remain steady but the unreported quality of the home will increase.  A very big plus for the Buyers out there.

That is why I strongly urge anyone with a less than ideal home to get it on the market now.  The amount you may gross for your home may never get higher or sell in less time, properly marketed, than what it is today.