There are a wide range of perspectives about what market time represents in real estate. Opinions may vary – and everyone will have one – as to why a particular property is not selling. The most common reason given is that a property is overpriced; an obvious observation which does not answer the deeper question of why it may be overpriced.
As I discussed in an earlier journal entry (29 January 2013), timing is, in my opinion, probably the most important consideration in selling real estate. Marketing time is almost certain to be a consideration when there is a weak demand for the property type being offered. During the depths of the recent real estate recession, several property types fell out of favor for a variety of reasons. Among the property types racking up days, months, and years on the market:
- vacant or unimproved land
- second homes
- manufactured homes
- ranch property
- recreational property
- desert property
- mountain property
In my view, the most important contributing factor resulting in weak demand for a particular type of property is limited availability of financing. When demand weakens and marketing times show signs of extending beyond predictability, lenders back away from the risk of vanishing equity. When lending for a specific property type becomes limited, another problem is created; an oversupply of competing property types flooding the market place. This chain of events represents the systemic nature of how weak demand can develop for a particular property. Unfortunately for the property owner, this is a socio-economic problem over which brokers and property owners have very little control. Selling in this type of market is sure to result in seller concessions.
Actions within the control of the listing broker and the seller, and which can go a long way toward facilitating a sale, involve a few basic marketing considerations. One such consideration is targeting exposure to qualified prospective buyers who match a buyer profile for the property in question:
- Who is the buyer?
- Where is the buyer?
- Which media will best target the buyer?
I know, it’s too simple. The reality is that few brokers and sellers stop long enough to ask the questions.