A recent article in a local Malibu newspaper made the point that in Malibu real estate during the last 12 months, 63% of the homes did not sell. That is a big number of failures. What is the reason behind this high failure rate? Is the market tanking?
Malibu is hybrid market where no two properties are the same or no two Sellers for that matter. Unlike other areas there is no one size fits all formula to pricing a property to sell. The Realtors job is to price a property so that within a reasonable amount of time the property will sell. This pricing is accomplished by analyzing the current market for similar properties and the past sales numbers for similar properties. The suggested list price of a Realtor is more of a range that is likely to attract Buyers and hopefully generate offers. No one has a crystal ball to predict the actual sales price. Even so, pricing is the number #1 thing that sells a house. Market price is an ever moving target that will find its own equilibrium. If the price is to low there will be multiple offers driving the price up to a market price. If your price it too high there will be no offers and the price will need to be lowered until it gets to a point where there are offers generated. This is what is known as “chasing the market”.
In Malibu there are other issues. Sellers of Malibu real estate are often not in any financial hardships and can afford to wait for a Buyer to pay their price. Additionally, many Malibu Sellers have been successful in other aspects of their lives and like to think that they are real estate professionals. They think they know more than their Realtor and can dictate the how, what, where, and when of listing. Because the asking price of Malibu real estate is so high and the commission potential so great Agents don’t always have the last word on pricing. Agents are willing to take on an overpriced listing in hopes they will eventually get the property price down to where it will sell. Hence, the 63% failure rate on Malibu real estate listings. Price is the most important element of a listing and when priced correctly the properties almost always sell.