Ertie asked a question on Trulia, he indicated that he felt that Basking Ridge had taken another 10-20% dive in the past year. He requested that Realtors need not reply to the question. I couldn’t resist – I answered the question…as did a handful of other Realtors. I told Ertie that I didn’t think we were down that much, I showed him some research I had done for a potential client: A client who had purhcased his home in 2005 for a lot of money and wanted to put it on the market now and not lose anything. I found six houses (between $900,000 and $1,500,000) that sold in 2005 and again in 2009 or 2010. I did the math – based on the closed sale prices – and I found that the average decrease in sale price was 10%. Ertie came back to Trulia to read our answers and still disputed our position – turns out he was basing his conclusion on LIST PRICE, not sale price. List price is not a reflection of market value – it is a reflection of what a seller believes his house is worth, most likely leaving room for negotiation. Market value cannot be determined with both a buyer and a seller… so, to further prove my point – because it keeps coming up again and again – I did some more reasearch. I opened up the price range and searched for sale house sales. I found 23 homes that sold in 2005 and again in the last 12 months. The average change in closed sale price was only 13%.
Yes, Ertie, values are down in Basking Ridge – but not 10 or 20% every year. And there is nothing wrong with a price adjustment! In fact, if your home isn’t selling (and it shows well), you SHOULD adjust the price. As evidenced each month on the page of my website where I track closed sales – Basking Ridge averages 96-97% of list price. And when a home hits the “right price”, it will sell within 30 days (I know, I’ve done the research!).
