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Rises Like A Rocket, Falls Like A Feather?

 

Sometimes prices soar, rising at an impressive speed. This usually makes headlines and gets everyone a bit crazy and can fuel buying activity. Most rapid price escalations are rather easily explained, usually the result of low supply and high demand, or new demand.
 
 
Often when the press taps into big price declines, they are reporting on the price declines that are newsworthy, sensational. And that usually entails a sale price sharply off an excessive asking price. That is not necessarily indicative of overall market conditions. Often it is not even close. These instances require closer scrutiny to extrapolate the exact details, not just the newsworthy headline. Often a $25 million sale on a home listed for $45 million where the headline screams "33% Price Decline!" reveals a home that should have been priced at $30 million and may have actually sold for $27.5 million if it was priced correctly to begin with.
 
 
Yes, after extreme price escalations there are almost always periods of rebalancing, and some prices will come down. Not always, though, in areas where the market is simply taking a breather or is just in the first phase of expansion. While the downward feather-style drop in prices can persist, often that feather is caught mid-air. Feather-style price escalations happen too, mostly based on more boring inflation numbers that hardly get any attention. That is the escalation that is more reliable.

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Ken interprets market data, staying in constant communication and offering valuable insight that then translates into an informed decision.

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