When to Drop Your Listing Price

Though low inventory is prompting buyers to raise their offers in order to beat out competitors, you still want your sellers to know: an overpriced listing will linger on the market. Buyers pay attention to time on market and may erroneously assume something is wrong with a property that has gone “stale.” Real estate pros say it’s critical to determine what time frame is considered stale in your market and drop the price of your listing before getting to that pivotal moment.

Ronald Dwyer / Realtor

"I typically drop the price after the third week on the market, usually in $5,000 to $10,000 increments.  But I may be more aggressive than most. DwyerProperties.com powered by 3DX Real Estate.
Price cuts in the Detroit-area market  have been common lately. But “there is a strange change that is in the air, and sellers are starting to have to become more humble. I would not say it is a buyer’s market, but a new balance between buyers and sellers has been hitting us since May of this year", said Ronald Dwyer of

Soaring home prices may make buyers pause, but houses are still selling fast. Nationwide, the average time a home spent on the market was 34 days , according to the National Association of REALTORS®. Some sellers may be adamant about “testing the market” with a high asking price, so you should have a game plan for what to do if it backfires. I personally don’t believe in testing the market, but if we enter the market [with a list price] pushing the top of the range, we can easily gauge response within seven to 10 days.  “It’s almost a certainty that if we don’t get an offer within that first 10-day period, then we’ve missed the mark.”

Sellers should be open to do a rapid price adjustment that can then result in a quicker sale. You can bring those same buyers back—the ones who liked the property in the first place and who will view the price adjustment as ‘the seller is listening to me.

The long-term consequences of not buying a house

The longer a person puts off buying a home, the more they will pay for one and the more likely they are to have mortgage debt later in life.

Research from the Urban Institute, a Washington, D.C.-based think tank, shows people who bought their houses between the ages of 25 and 34 (the age millennials are now), had $135,000 more value built up in their homes when they turned 60 than people who bought their first homes after they were 45 years old.

The bottom line: “The delay [in buying a house] is not just going to affect [millennials’] current life satisfaction. It could have a longer term effect on their wealth as they age,” said Jung Hyun Choi, a research associate with the Urban Institute.

Will millennials benefit from historically low mortgage rates?

Mortgage rates are at near-record lows as many millennials are hitting their 30s — the age when many people traditionally become homeowners. Yet the low rates are unlikely to significantly increase millennial homeownership

Are you a first-time home buyer?
Are you a renter tired of renting?
 Interest rates are still at and all time low
Would you like to qualify for $7,500 towards
 a down payment of your home?
 Give me a call or send me a message
 and I will get you going on the
right path. 248-390-6345.

rates, which are about 8 percent lower than past generations, according to analysts.

Here’s what’s stacked up against millennials, and why homeownership matters in building wealth, at a time when this generation is already lagging behind its predecessors. While there is no official definition, millennials are generally considered people born between 1981 and 1996.

Current housing market conditions
The interest rates for a 30-year fixed rate mortgage dropped sharply last week to 3.6 percent, on fears of an economic downturn. The current rates are more than a percentage point lower than they were last November.

Let’s say you considered buying a $300,000 home on a 30-year mortgage in the fall, but held off. If you were to buy the same house now, the interest rate drop could decrease your monthly payments by $160 per month and save more than $60,000 over the life of the loan.

“Conditions are very favorable [to buy a home],” said Greg McBride, an economist with Bankrate.com. In addition to low interest rates, “the labor market is the best it’s been.”

But there aren’t many affordable homes on the market. Older Americans are not “moving up” to larger houses like they did in past generations. Investors have bought up many of the smaller homes that would have been affordable for first-time homebuyers. And developers are building more apartments to rent instead of condos to sell.

Even if there were lots of homes to choose from, many millennials would have a difficult time saving enough money to purchase one. What’s holding them back? Student debt and the high cost of housing.

Student debt weighs on millennials’ ability to save and make mortgage payments. With college costs soaring, the average student loan balance for a millennial borrower is $34,500, according the consumer credit reporting agency Experian. It also factors into whether a lender will approve a borrower’s loan.

But even if millions of millennials weren’t contending with the expense of college loans, incomes have not kept up with rising housing costs.

If someone with a median income saved 10 percent of their earnings, it would now take them 5.7 years to save enough money for a 20-percent down payment on a median-valued home — that’s 1.5 years longer than it took in 1988..

The good news: A 20-percent down payment is no longer needed to purchase a home. Lenders and government programs offer a variety of other options for lower down payments. Some of them come with an additional mortgage insurance that will be added to monthly payments, but that extra fee can be eliminated once 20 percent of the home’s value is paid down.

30-year mortgage rate falls to its lowest level in nearly three years

Economic uncertainty drove mortgage rates down, according to Freddie Mac data released Thursday, with the popular 30-year reaching its lowest level in nearly three years.

The 30-year fixed-rate average fell to 3.55 percent from 3.60 percent — the lowest since November 2016 — with an average 0.5 point. (Points are fees — equivalent to 1 percent of the loan amount — paid to a lender on top of the interest rate.) It averaged 4.51 percent a year ago.

Ronald Dwyer / Realtor

The 15-year fixed-rate average fell to 3.03 percent from 3.07 percent with an average 0.5 point. It averaged 3.98 percent a year ago. The five-year adjustable rate average decreased to 3.32 percent from 3.35 percent with 

"The drop in interest rates to a 3 year low, is fantastic news for buyers since lower mortgage rates make buying much more affordable," said Ronald Dwyer, a veteran Realtor with DwyerProperties.com powered by 3DX Real Estate. "Home prices have gone up anywhere from three percent to 6 percent and some areas higher in the past year in the Metro Detroit area, so these lower interest rates really help new home buyers  Now is the time to buy!"