Diana Olick’s account of a broker’s [tag-ice]open house[/tag-ice] in one of those fancy neighborhoods near Washington gives us a glimpse of a new real estate reality.
Everything on that street, according to her, was at least two million or more before the last price crunch. Diana walked in just in time to find one house that was going for a little less. In fact, that [tag-self]house[/tag-self] was about to be marked down another $100,000.
Diana reports the agent referred to the price reduction as “repositioning.”
(Okay. But didn’t Kmart use the same techniques years ago when they had their famous Blue Light Specials)?
So what was wrong with this particular house besides a slower market and over rated prices?
Kitchen wasn’t nice enough, and please don’t tell me this- a shared driveway with the next door neighbors.
As the agent explained it to Diana, the problem was not with the house, but the market.
So what happens if repositioning doesn’t get rejuvenated?
You go on to the next stage called “drama pricing.”
Fun, isn’t it?
The agent explained this move as cutting the competition so that the buyer will take notice and suddenly realize this house has value after all. That’s even if buyers can still get a much larger house with its own driveway, nicer kitchen, etc. for a much lower price in other areas.
Let’s look at what is really going on.
Prices went out through the roof during the [tag-tec]boom market[/tag-tec]. People bought in believing it would never end. Now that some of them must sell, they still want to get out at least what they put in. Inconvenient matters like a not- so- nice kitchen or bedrooms that were too small were easily overlooked then. But not now.
Call it what you will, but old fashioned value has returned after a very long vacation.