Denver Market Reality: Seller's Dilemma in a Slowing Market

Market Reality: Seller's Dilemma in a Slowing Market

By David Schlichter

Recently, a prospective client emailed me about selling a condo he owns that had been previously listed with another agent and expired after several months. Prior to speaking with him, I dug into the data, and it wasn’t pretty. 

Over the last 6 months there had been 33 comparable nearby listings within a half mile radius. Guess how many of those units had sold? Just 3. The other 30 had expired or were lingering in active status on the market. In other words, sellers of units like his had a 91% chance of their unit expiring or lingering on the market, and just a 9% chance of selling in that six month period.

You might expect this to be the part of the story where I say, "That's when I took over and immediately got the condo sold!" 

No. This is the part of the story when I showed the seller the data, explained the realities of the current market, and told him the honest truth about how unlikely it was that his listing would actually sell in this market for the price he was willing to accept. Rather than push to get the listing, I pushed him to think critically about whether this was the right time to try again to sell the unit, or if it would be more advantageous for him to rent it out.

His story is one of many that I thought of when speaking with The Wall Street Journal for its story this week about sellers who are facing tough decisions about selling properties vs. renting them out. While this situation can be a source of real stress for some homeowners, there are some good lessons hidden beneath the surface.

First, for prospective sellers: you deserve an agent who a) knows exactly what is happening with the market, b) is able to explain what the implications of those market conditions will be for the potential sale of your property, and c) is willing and able to explain all of your options—including the option of not selling the property. 

Second, for prospective buyers: there are lots of sellers right now who are very eager to sell (even at prices well below their asking price and/or the price at which they bought their home). There are more homes for sale per buyer looking than there have been in over a decade, so this is a fantastic time to be exploring purchasing a home.

Finally, third, for agents: you owe it to your clients to be honest and direct about market conditions. When you develop a reputation for giving your clients good advice that is in their best interests, good things happen. Want to know what happened with the condo seller about whom I started this post? He chose to hold off on selling his condo--and reached out me again this week about selling his primary residence...in a neighborhood where more than 50% of nearby homes are selling. Some might call it karma. I think of it as just the result of giving our clients what they deserve. 

For the full WSJ article, click here.