Have you noticed a trend in the Kitchener-Waterloo housing market where every modest detached property is priced at $699,900? Or if the selling Realtor wants to aggravate first-time buyers even more, why not $599,900?
As frustrating as this can be to buyers, there is a method to the marketing technique. It requires a skilled Buyer's Realtor who knows the Kitchener-Waterloo housing market to navigate these artificial list prices. Let's first jump into why properties are marketed in such a way.
- Bring buyers through the listing - Regardless of actual market value, sometimes it pays to list the property well below to create buzz.
- The buyer pool at this price point is robust - All our 2023 buyers shopping for a starter home between $500,000 - $800,000 in Kitchener-Waterloo have been in multiple offer situations. The demand for affordable detached homes in our local housing market shows no sign of letting up this year.
- Sellers are relying on their Realtor's strategy of 'pricing for action' - If it isn't broken, don't fix it. I would be hard-pressed to find a single detached listing under $799,900 that was publically listed that didn't have a set a date for offers. The strategy appears sound and typically yields the highest sale price that the market is willing to provide.
So what are buyers supposed to do in these situations? Short answer, make sure you have an experienced local Buyer Realtor. It's one thing to be caught up in a multiple-offer situation for a home you love, and it's another thing to be in a multiple-offer situation with a Realtor who is up to date on pricing in the immediate area. Often Kitchener-Waterloo listings at these price points attract attention from out-of-town buyers with out-of-town Realtors. My experience suggests that many of these buyers are ill-equipped to bring serious offers in competitive situations. Whether fishing for a deal or their Realtor doesn't have access to good comparables when advising their clients, these buyers are typically behind the eight ball when competing.
Buyers in Kitchener-Waterloo shopping for an affordable single detached property need to be grounded in what they can afford. This isn't meant to be meanspirited, but the reality is that it's relatively easy for a qualified local Realtor to assess how attractive a listing is and what the competition will be like. Artificially low list prices are just that. Recent sales, how many offers you are up against and what specific premiums are on the listing all need to be skillfully considered to have a chance of being a successful buyer.
The Kitchener-Waterloo housing market is shaping to have another competitive marketplace throughout the year at these price points. If you or someone you know wants to enter the market, we have the knowledge and experience to get you a great home regardless of the competition. We are ready to help!