b-LOG: The $27,000 Ford Tempo
It’s a beautiful Saturday in April and you’ve finally made the decision to part with your beloved car. Pardon me. To call it simply a car is an affront to the relationship you’ve built while you and ‘her’ cruised around the last 35 years.
After much thought, several family meetings and a few trips through your cherished photo album, the time to say goodbye is finally here. You have a few things to do first. One is you need to get her ready for market.
You clean out all the loose items. Wipe down the dash and doors, vacuum and get her looking her Sunday’s best. Then it’s time to figure out what to ask.
Time to head inside and fire up the ol’ internet machine and see how the market is for a 35 year old, 4 door sedan these days. Within a few hundred kilometres of your home, there are 11 others similar in terms of age, kilometres driven and wear and tear.
Most of them are priced in the $14 to 18,000 range.
(Side note, the Ford Tempo example was only included out of nostalgia )
Except there is this one Tempo just up the highway with an asking price of $25,000. It has more kilometres and is clearly not as beautiful as yours. Based on that you get your posting together with an asking price of $27,000. And hey, if it doesn’t sell, you can always come down in price right?
< the scene transitions back to the Niagara real estate market >
Mr. & Mrs. Seller are getting ready to sell their 35 year old 2 storey home. There are 11 comparable homes for sale in the $385 – 435,000 range. Except for that one that is listed at $473,900.
You can see where this is going…
What we’re seeing in Niagara is a gap between asking price and selling price that is growing marginally. Rather than 6 to 10%, in some cases, it is 12 to 18% apart.
Meaning, in a specific area, the average ASKING price may be $475,000 while the average SELLING price in that same area for the last 3 months is actually $415,000, a 14.5% gap.
Imagine if all the recent Ford Tempo sales in the last 6 months averaged $11,500 but the current stock of available cars for sale average $16,500.
The gap leads to increased inventory, more supply, more days on the market (longer time to sell) and a perception that the market is ‘soft’, whether for homes or Ford Tempos.
The reality is though that both the homes and the sweet, sweet Tempos may both be getting record prices in spite of what may be a greedy seller marketplace.
So, when you’re looking to sell virtually anything, look deeper than that overly ambitious and slightly out-of-touch seller. Look at the market in full, supply and demand, time to sell and equally or more important, the market (buyer’s) ability and willingness to pay what people are selling.
Would you like to discuss this further? Reach out to us anytime. We love chatting real estate!
…and credit for the Ford’tastic photo belongs with Nadine Shaabana, found on IG here: @nadineshaabana
Thank-you for visiting.