I was showing property yesterday to a prospect who is going to buy a house soon.  The house they liked the most has been on the market for two years.  They thought it was a great house and I do too.  They then asked, “why has this house been on the market for two years?”

I think the reason they were asking that question was because they assumed there must be something wrong with the house.  They liked it, but why has nobody else bought it. 

These sellers have been “chasing the market down”.  When they originally listed the house at $850,000, it should have been priced at $799,000.  After about 6 months, they dropped the price to $799,000 – at that time, the house really should have been reduced to $749,000 because we are in a declining market.  After another 6 months they reduced the price to $699,000 – at that time, they should have reduced it to $649,000. 

It is important to realize that markets change daily, and just because an agent tells a seller that his or her house is worth $799,000, it does not mean that it is going to be worth $799,000 in six months.  For years, we were in an appreciating market, where property was worth more every six months than it was before.

It is important to realize that markets are not constant.  For years they went up and recently they have been going down.  We live in changing times, and one has to look at market conditions on a regular basis to figure out what their property is worth.