Pricing Strategies for a San Diego Seller’s Market

In theory, selling a home in a San Diego seller’s market should be as easy as it gets. Decide to sell, price high, and let the offers roll in.

But nothing is as easy as it seems.

When entering a San Diego seller’s market, sellers will want to dedicate time to devising a strategy. And in order for that strategy to be effective, you need to first do some homework so as to understand the pros and cons each strategy affords you.

With that in mind, below are some possible strategies sellers can take when assessing a San Diego seller’s market. Each has its own list of pros and cons, so San Diego sellers will want to determine which works for their specific situation.

Pre-Strategy Homework: Assess the Market

Before you can accurately devise and decide on a strategy, you need to research and understand some important factors.

• Days on Market : The Average Days on Market (DOM) metric will show San Diego home sellers how fast (or slow) area houses are selling. If homes are selling in under 10 days, then there is strong evidence that you are entering a San Diego seller’s market.
• Sale Price versus Asking Price : What sellers set as an asking price versus what the home sold for are a good indication of where the market stands. In most cases, when the sale price is at least 10% higher than the asking price, you can feel confident that you are in a seller’s market.
• Historical Prices : Prices that continuously rise over time can be a good indication of a San Diego seller’s market. Research the area’s prices to see if they are falling or rising to help determine the market’s condition.

San Diego Seller’s Market Strategy Number 1 : Market Value

The first step to selling a San Diego home is to determine the actual market value of your home. You can use any number of online tools which will provide an estimate of this value to use as a baseline.

To better hone in on what your value is, start to research the comparable home sales in the San Diego area. By understanding what prices are being supported, you will be able to see where your home’s likely market value resides.

By entering a San Diego seller’s market by listing at market value, sellers place themselves in a position to quickly receive a full-price offer. So if you are looking for a quick sale, starting off at a justified listing price can help you get there.

San Diego Seller’s Market Strategy Number 2 : Low List Price

With your market value in hand, sellers can generate a fast sale by listing below this number. Starting 5-10% below market value can create a frenzy of interested buyers. Once this happens, sellers could find themselves in a bidding war.

While bidding wars can be a good strategy for sellers, as the intense interest from multiple parties can work to actually drive up the price of the home, they can create more questions for the sellers. With multiple offers on the table, sellers will need to sift through which buyer best fits their needs – and this does not always come down to just money.

However, a low list price in a San Diego seller’s market can backfire. For example, if you decide to list low and only receive one offer you might be stuck at that lower value. When going low, seller’s need to be prepared to actually accept that price.

San Diego Seller’s Market Strategy Number 3 : High List Price

There are times when sellers are not in a big hurry to complete a sale. In situations like this, San Diego sellers can price their home 5-10% above market value to see if there are any takers. But this strategy is not for the faint of heart.

When San Diego sellers price their home on the higher end – even in a San Diego seller’s market – they run the risk of the home sitting on the market. And when a home sits for too long, buyers begin to wonder what is wrong with it.

The other potential issue with this tactic is that if a home is priced too high, your buyer’s lender might not appraise at the same value. When this happens, sellers could lose buyers at the last minute or end up limiting themselves to all-cash buyers.

But this is not to say that listing above market value will not be successful. In a San Diego seller’s market, it is possible for a home to sell at a premium. However, seller’s do need to balance this with the risk that the home will not sell.