Why Luxury Homes Sell Slowly

October 25, 2018October 25, 2018 Chris Prickett

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A reader recently ask me why it takes so much longer for a luxury home to sell, even in a market where homes are selling quickly. The answer is simple but the explanation is much more complex.

In the current market, in our neck of the woods, a home listed to sell for $200,000 or less would create a feeding frenzy resembling a fattened pig in a piranha pond. Hundreds of inquiries and dozens of offers would be expected. Conversely, something at $1 million or more, regardless of its upgraded doodads and whatnots, would likely get few showings and might not see an offer for months.

Why? There is currently a backlog of pre-qualified entry-level buyers who have been priced out of the market. Affordable homes are just not hanging from the trees.

At higher prices, there are fewer qualified buyers. When you get near or above seven figures, there are far fewer piranhas in the pond. Buyers who can qualify for luxury homes tend to be in much less of a hurry as well. It’s not uncommon for the process to take months and sometimes more than a year. Luxury buyers are much more demanding, willing to wait for what they want.

Relative to the number of qualified buyers, there are plenty of luxury homes available these days. Unlike the entry market, these buyers can afford to be picky.

If you price a“first-time buyer” home 5 percent over market, you’ll still see some interest. Not so in a high-dollar, luxury home. An error in pricing could result in many days on the market and missing the buying season altogether.

When selling a high-end home, both seller and agent really need to be on their game. Pricing, marketing and the “show-ability” of the home all need to be top-notch. And, you’ll still likely be waiting awhile.

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Chris Prickett

Former contractor, former home inspector and funny guy, Chris Prickett is owner and designated broker of Prickett Realty. A New Jersey native, Prickett has been a top-producing REALTOR® in North Phoenix over the past decade. He has been a columnist since 2005. Over the Prickett Fence is published weekly by In&Out Publications.