A Seller’s Market is Not Necessarily a Luxury Seller’s Market

Utilizing an auction to sell your home is a highly effective method, and in a seller’s market, auctions can give that seller more control than they thought possible. Just like in a current scenario where a seller can have multiple offers on their home, an auction can bring even more qualified buyers to the table, often showcasing the true market value of the seller’s home. With an auction, the sense of urgency for buyers is heightened, increasing the demand for the property, putting the control in the seller’s hands.

In a recent study published by Zillow, sellers are controlling the market and will continue to do so for the next two years. “For the past several years, home sellers held all the cards at the negotiating table, fielding multiple offers while buyers faced stiff competition and a fast-moving market,” said Zillow’s senior economist, Aaron Terrazas. 100 economists were surveyed for the study and more than 75% predicted that the market won’t favor buyers until 2020 at the earliest.

“What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales,” said Lawrence Yun, National Association of Realtor’s (NAR) chief economist in a recent article for Inman. Yun added that “the root cause is without a doubt the severe housing shortage that is not releasing its grip on the nations’ housing market.”

However, high-end, luxury properties are not experiencing this excitement. “We’ve seen a slowdown at the top end of the housing market,” Terrazas mentioned in an interview with CNBC earlier this year. According to a Forbes.com article, although there seems to be an increase in the amount of people that can afford a high-end home, the demand isn’t there.

So while it appears to still be a seller’s market out there, sellers of luxury properties are not reaping the same rewards. Traditional methods of selling a luxury home are proving to not be as effective as they once were, leading to luxury properties sitting on the market longer. More luxury inventory drives prices down. According to the Zillow study, in over half of the United States’ largest metropolitans, home growth is slowing and price cuts are becoming much more common. Interluxe is all too familiar with this scenario. Rather than have a luxury property endure numerous price cuts, Interluxe’s approach to marketing luxury properties brings the market to the property and the seller is able to actualize a real, market-value price for their home.

Auctions for these properties can make it a seller’s market once again for luxury sellers. “The element of control that our sellers feel throughout our process is exceptional,” said Scott Kirk, President of Charlotte, NC-based luxury marketing company Interluxe. The benefit of auctioning a luxury property is that it can attract highly-qualified buyers and create a sense of urgency and demand for the property that it has, in the current market, struggled to find.

In this uncertain market where luxury properties aren’t being snatched up like they used to, an auction might be the right way to go for a seller to retain their control.