Real estate activity during the year 2021 has continued to impact the negative impression the public has of Realtors. There are dozens of news articles claiming agents didn’t do due diligence, listed homes incorrectly, represented buyers incorrectly and even sold homes without the homeowner being aware. It’s a crazy world out there, let’s dig into how Regina Realtor’s determine home prices.
Let’s get one thing straight, Regina realtors don’t determine the price of housing. We do review sales and statistics and try to time the market upward or downward of a trend. When I list a home for sale, there are hundreds of sales that occurred ahead of the home I am listing that determined the value of the property I'm working on.
Pricing ahead of the market is another strategy we use when determining home values. If you are working in a price declining market, it’s a beneficial strategy to list 5-10% lower than the most recent sale so that buyers recognize it’s “already a deal” and that the home is priced well and in turn, they feel they got a good deal. While the buyer got a good deal, the seller priced in a range he would likely sell in anyways, but by pricing ahead of the market he saved himself the days on the market and inevitable low ball offers.
When we price ahead of the market in an upward climbing real estate market, pricing 2-5% ahead of the most recent sale also makes buyers feel like they're getting a good deal because they know that three months from now, prices will be even higher.
But at the end of the day, a buyer and a seller agreeing on one single purchase/sale price is what determines a home value. As a Regina Realtor, I can suggest a price that’s too high or too low and the house won't sell.
Real estate prices are driven by simple economics, the principle of supply and demand.
Four laws of supply and demand:
1) If the supply increases and demand stays the same, the price will go down.
2) If the supply decreases and demand stays the same, the price will go up.
3) If the supply stays the same and demand increases, the price will go up.
4) If the supply stays the same and demand decreases, the price will go down.
The real estate market in 2020-2022 was entirely affected by supply and demand, not international buyers, not real estate flippers or investors. The biggest pocket of people making decisions to buy and sell are people who are experiencing life changes and need to buy or sell real estate. Canada had record low amounts of inventory but record high sales which created a real estate environment where prices were bound to increase.
Regina Realtors have nothing to do with determining housing prices and in fact, our market was one of the softest markets in Canada during this most recent boom with only a 5% increase in housing prices when looking at the 10 year average.
For more information on working Regina Realtors and how we can help you with your real estate needs, reach out to Kelsey by filling out the online contact form or calling at 306-552-7047.
Kelsey Smith Is Regina’s Choice
Choosing the right Realtor® is key to ensure a positive and successful real estate transaction. Kelsey Smith promises to deliver the education and time necessary to buy or sell your Regina home. Call 1-306-552-7047 and rest easy knowing you have made the right choice.