The Boston Globe reports:
Home sellers are learning what any retailer, from Wal-Mart to the owner of the corner gas station, already knows: Low prices are one of the surest ways to beat the competition.
Coldwell Banker Residential Brokerage, Massachusetts' largest real estate firm with more than 3,500 agents, is coaching agents on how to persuade clients to list their homes at an asking price that undercuts those of comparable ones on the market.
The hope is low prices will attract more prospective buyers, leading to faster sales. Other real estate agents in the Boston area report success with similar strategies in a housing market with an unprecedented glut of properties for sale.
Called ``drama pricing" or ``energy pricing," it is a drastic measure for difficult times. And it seems to run counter to the conventional strategy of selling your home for the highest price possible.
Buyers are ``overloaded" with options and ``only respond when they see a perception of value," said Angela Stamoulos, who teaches Coldwell Banker's course on this pricing technique, which the firm rolled out this spring in Connecticut and last month in Massachusetts.
By grabbing buyers' attention, she said, ``the true market value of the property comes to fruition."
While the real estate industry has been reluctant to publicly acknowledge a downturn, that's not what they are telling their clients.
After Robert Picciano's employer, EMC Corp., relocated him to Connecticut, he and his wife wanted to sell their two-bedroom condominium in Walpole. They estimated its value at $360,000.
But Coldwell Banker agent Robin Wish laid out the facts on how tough it would be to sell: five other active condo listings in their complex -- all 1,488 square feet, like Picciano's -- were on the market for $329,900 to $359,900. Wish suggested $342,500, slightly undercutting another two-bedroom with extras her clients didn't have, a fireplace and extra bath.
``We were disappointed," Jennifer Picciano, Robert's wife, said.
Within four hours of their May open house, the couple received an offer at the asking price -- within the week, a second offer, slightly smaller, came in.
Their reaction to the quick sale? ``Shock," Robert Picciano said. They expect to close July 31 and are buying a home in Fairfield, Conn.
Four of the other condos haven't sold, Wish said, including one on the market since April with more amenities. The price started at $364,900, and has been cut nine times, to $319,900, according to the listing.
The economic fundamentals are finally catching up to the no population growth areas.
The Boston Globe reported on June 21st :
Boston lost 30,107 residents in the first half of this decade, a precipitous drop that ranked the city among the biggest population losers of any major municipality in the country, according to US Census Bureau estimates to be released today.
Something to think about if you are long real estate in the Boston area.If population is declining,the only way real estate can stay up is by speculators.
