. . . Capitulation?
Here’s the latest pricing activity at what I’ll call “Motivated in Minnetonka”:
7/17/09: old price – $595k; new price – $585k
8/7/09: old price – $585k; new price – $575k
8/19/09: old price- $575k; new price – $565k
8/26/09: old price – $565k; new price – $555k
9/3/09: old price – $555k; new price – $545k
9/9/09: old price – $545k; new price; $535k
So what happened next?
Three hours after dropping the price $10k on Wednesday, the Sellers did something unexpected: they took a whopping, $35k price cut — to $500k.
“Motivated in Minnetonka”
Only the listing agent and Seller know for sure, but you’d guess one of two things is going on: the Seller is out of time, and is capitulating on price in order to get a deal; or, there are a couple of prospective Buyers circling but “sitting on the fence.”
If the latter scenario applies, the rationale for taking one, last dramatic price cut is to create a sense of urgency amongst the “fence-sitters.”
Often times, the ensuing competition for the home results in the Seller recouping at least some of the last price drop — a phenomenon I refer to as “bouncing off the bottom.”
