The economy is growing; the real estate market is strong. Still, some properties languish on the market for months, and in many cases, years.
Of the 550 residential properties currently listed for sale in the Aspen-Snowmass area, 150, or 27 percent, have been on the market for more than a year and 85 have been for sale for over two years. The number of properties that don’t sell in a year or more is likely much higher as some sellers temporarily remove their properties that don’t sell from the market after a lengthy period and then re-list them a short period later.
The more expensive the home, the more likely it is to sit unsold. About 60 percent of the properties that have been on the market for over a year are priced at more than $5 million. On average across the country, the highest priced homes take 153 percent more time to sell than typical moderate priced homes, according to Realtor.com. The average home in America sells within about 53 days. About 10 percent of luxury homes nationally spend more than a year on the market, but in a luxury resort market like Aspen and Snowmass, that percent is almost three times greater.
There are several reasons that high-value homes common in Aspen and Snowmass tend to stay on the market for long periods of time. One obvious reason is there are far fewer buyers that can afford homes priced over $5 million. Another is that buyers of luxury vacation homes are using discretionary funds and can afford to wait for the exact property they’re looking for. This can also be the case for sellers who can afford to hold onto expensive homes that don’t sell. But, the most common reason is that many expensive homes that sit on the market for months and years are just priced too high for what the market perceives to be their true value.
Keeping a home on the market when it hasn’t sold for a year or longer is probably not the best strategy if you’re trying to sell at the highest price. Studies show that nationally, the first 60 to 90 days can be the most critical period of time for getting a luxury home sold at the best price. For a seasonal resort area like Aspen-Snowmass, the period could be 90 to 180 days due to the slow parts of the season that can stretch out the sales process.
According to a national report by Concierge Auctions, homes that take longer than 180 days to sell spend far longer on the market and sell in the end at prices significantly below their original asking prices, while homes that sell in less than 180 days tend to sell in much shorter periods of time at prices near or at the asking price. This is likely a reflection of the initial asking price being closer to the properties’ true value rather than an unreasonably high “testing the market” asking price that potentially scares off interested buyers.
When properties remain on the market unsold for extended periods of time, they risk being labeled as “stale listings” that buyers and brokers may assume have something wrong with them. When a property falls into this category, it can become even more difficult to sell. If you’re a seller that finds yourself in this position, the best strategy can be to take the property off the market and reassess the situation.
During this time-out period, you and your advisers should reconsider the asking price and look at upgrading the property — from improving the staging of the property with new furniture, fixtures, landscaping and cosmetic renovations to making more significant renovations.
In addition, you should rethink how the property is being marketed and promoted. A fresh new approach could turn a “for sale … forever” listing into a quick-sale success story.
Lori Small is a luxury real estate broker associate with Coldwell Banker Mason Morse; William Small is the founder and CEO of Zenith Realty Advisors LLC, a commercial-investment real estate advisory and investment firm. Lori can be reached at Lori@LoriSmall.com and William can be contacted at William.Small@ZenithInvestment.com.