Thursday, 19 April 2012

How's the Market?

How's the market?  As a REALTOR®  this is one of the questions that I get most often.  In short, the Halifax market is great!  However, this is a bit of a generalization since Halifax Regional Municipality is actually broken down into 30+ areas, each with their own unique market values and sales to list ratio statistics.  Some areas of Halifax, for example, are experiencing higher than normal list to sale ratios and we've begun to see a bidding war or two in some cases.  Definitely a "Seller's Market".  On the flip side, there are other areas of HRM where there is an oversupply of houses on the market and they are just sitting there which is driving list prices down.  complicating matters is that each of these 30+ MLS areas in HRM have their own several separate and distinct sub-markets doing their own thing.   So, in situations such as these what is fair market value and how do you determine your bottom line?  


 The economic laws of real estate are just like with any other product and prices are driven by supply and demand.   "Fair Market Value" actual has a simple definition.  It is the price that a buyer is willing to pay and a Seller is willing to accept if neither party is under duress that the other party can use to their advantage. 

"Appraised Value", "Tax Value", "Perceived Value" and "Internet Value" have nothing to do with fair market value other than the effect that they may possibly have on what the Buyer is willing to pay.

What the Buyer is willing to pay determines only one half of fair market value, the other half being what the Seller is willing to accept both parties keeping in mind that there may be other ready, willing and able Buyers for the property.   In a multiple offer situation ("Bidding War"), you are likely to uncover the true fair market value of a property pretty darn quickly as Sellers instruct their agents to tell Buyer's agents to put their best and highest offer on the table from the start.   The same principle applies to a property that sits on the market for a long period of time with little or no interest.  If there is NO interest there is NO market,  therefore there is little value. 


It isn't about counting bricks or measuring square feet.  Fair market value more often than not depends on a meeting of the minds and the ability to perform.

3 comments:

  1. Drives me bonkers some days to be honest. My mom has had her mini home ion the market for a year! Yep, a whole year. Her realtor is awesome, band it shows well but its not selling. Grrrrrrrrr. Btw, love the blog. :)

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  2. Hi Tina,
    I know what you mean. I have a mini home listed in a park where there are a couple dozen others for sale. Definitely not an idea situation. I'm glad to see that you think that her realtor is awesome, too often the agent gets blamed when other factors are at play that all contribute to the problem. Thanks for stopping by and your kind words.

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  3. No problem Donna! I love that you found my blog. Even though I love Saskatchewan, I LOVE to read blogs from Nova Scotia. :)

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