I’m not sure that the headline describes what I am seeing more and more, but it gets down to the fact that many buyers today are purchasing well under what they can afford and what they qualify for.

Why does this matter?   It matters because there are people who can afford to purchase that $500-$600,000 home, but instead are purchasing in the $400-$450,000 range well within their budget.  Who could blame them?  With asset prices coming down in both the stock market and in real estate, there are many who are concerned about getting overleveraged.

So the challenge for all sellers at all price ranges is that even though you home might have been worth $600,000 two years ago and today it’s worth $525,000, many of the buyers who would have normally been interested in your home at $525,000 are now looking at purchasing homes in the $425-$450,000 range.  This trend is adding to the difficulty finding buyers for homes in this move up price range.

It’s all the more reason why ongoing price reductions are critical in this market.   In a declining market, the day you set a price on your home, the market is already moving away from it and it becomes more overpriced with each passing day.

It’s my belief that prices should be adjusted every 18-21 days to try to stay at pace with the market.   In some cases, a faster price reduction may be necessary especially if it’s brand new on the market and there is little or no showing activity.

So, to sell that $600k home, we’re looking for those $600k buyers, but also those buyers who can afford $650-$750k but who want to limit their exposure to residential real estate.