Just because the Los Angeles real estate market is low in inventory does not mean that you can go ahead and overprice your home.
Here are some examples of why:
There were 73 sales over the past six months, 11 of which had a price reduction during the course of the listing.
The sold price vs list of the 62 which did not have a price reduction was 102.54% with an average of 34 days on the market.
The sold price vs list of the 11 which were overpriced was 96.49% with an average of 109 days on the market.
Taking Santa Monica single family homes:
There were 96 sales over the past six months, 21 of which had a price reduction.
The sold price vs list price of the 76 which were priced well was 100.94% with an average of 40 days on the market.
The 21 which received a price reduction saw a sold vs. list price of 95.72% with average days on the market being 116.
Overpricing your home is almost always going to lead to a sales price lower than you would have received had the property been priced right at the beginning. Realtors® with their buyers are going to compare your property to recent sales and are either going to move on to the next home or make an offer consistent with the comparables.
Even in this low inventory market buyers are not going to overpay, especially if they are getting a loan which requires the home to appraise. In many areas of Los Angeles prices are at, and in some cases, higher than they were at the top of the market. Testing the waters with an overpriced home is going to backfire.
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