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Saturday, September 4, 2010

Listings, Shelf Life, & "The Ennui Factor"

How Much is Too Much
Time on the Market?

In most walks of life, qualities like patience and persistence are virtues.

So when are they vices?

In the housing market -- at least one that's not strongly appreciating.*

That's because homes that sit, unsold, for too long become shopworn.

Buyers naturally start to wonder why the home has sat so long, and start to zero in on shortcomings instead of overlooking them (if they come to look at all).

Meanwhile, Buyers' attention naturally turns to new listings, where the excitement and energy level are higher.

"The Ennui Factor"

Which is the other reason time on the market is the enemy of home sellers.

Most Sellers do a very good job having their home "market-ready" the first weeks and months that it's listed.

Ten -- or 50 -- showings later, not so much.

Lights that might have been turned on to greet a prospective Buyer earlier in the listing, aren't.

Ditto for dishes in the sink, freshly vacuumed carpeting, the (formerly) spotless windows, etc.

Or the home is now vacant.

All those factors diminish a home's appeal -- and therefore it's value.

As a result, whereas a modest price reduction earlier in the listing might have been sufficient, as time wears on, a dramatic one is often necessary to re-ignite Buyers' interest.

*In a market that's strongly appreciating, eventually an overpriced home will be market-priced (unless the owner raises their asking price -- which I've also seen).

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