There seems to be a lot of news for some reason recently on how the real estate market is going to go back to normal where people are indicating that overvalued properties are about to go back to what they should be. Therefore, they are encouraging people to sell now if they were thinking. Whether or not that is just a realtor advice to get more business who knows.
But one thing I observed which was kind of interesting was before all this news there was this one property that was asking for about $500,000 for what seemed to be a pretty old apartment. Nothing too special. After all this news other properties seemed to have gone higher up in prices. This one in particular was then listed to sell for about $540,000. That is quite a substantial bump in asking price isn’t? Physically nothing has changed either to my knowledge. So the only real conclusion is that they are adjusting the price to be more in-line with what other properties are now charging.
It makes you wonder if that is the right decision in other scenarios as well. For example, let’s pretend you run a restaurant that serves salad. Based on cost and all you determine $3 for a plain small salad bowl is a good price to make a profit. Then all of a sudden you realize other people are making way more money as they are charging $15 per bowl. Like there would you adjust it based on what everyone else is charging as well? The business money side would say yes if people are willing to pay that much. But personally it just seems a little wrong huh?