Richards: Lessons from music festivals and real estate markets
Last week, I traveled to the Deep South for the annual New Orleans Jazz and Heritage Festival, arguably the greatest multi-day music festival in the country. The name can be misleading; while jazz is ingrained in New Orleans culture, bands like Cage the Elephant, Luke Combs, and Pearl Jam represent distinctly different genres. The festival consistently features giants in the music industry and never disappoints.
A trip to New Orleans isn’t complete without indulging in its unique culinary offerings. One night after the show, my friend and I were eager to try a new restaurant.
Without a plan, we wandered around the area near the music venue, looking for something interesting. As we strolled through a bustling intersection filled with restaurants, we were naturally drawn to those that were busy. However, when we tried to get a table, the few restaurants we approached were fully booked.
We continued walking and came across a restaurant called Don Villavaso on the Bayou. It was a large establishment, disturbingly blaring hip-hop music, with only about a dozen tables occupied. We were hungry, but not desperate enough to enter an empty restaurant; after all, the lack of patrons suggested a mediocre dining experience. We eventually found a decent restaurant farther from the festival that could accommodate us. This experience reinforced the idea that scarcity drives demand. People instinctively desire what they cannot easily obtain, including a table at a fully booked restaurant.
The median home price in Eagle County has dropped nearly 5% over the past year, from $1,600,000 to $1,525,000, while the median days on the market have slightly increased from 23 to 30 days. Although these numbers aren’t dramatic, they indicate a slight trend toward a buyer’s market. Here’s what you need to know about this trend and how scarcity drives demand when selling your home.
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A few weeks ago, I wrote a column where I discussed the parameters for accurately valuing a property. The most important consideration is a close, if not identical, comparison of the most recent sale in your neighborhood that matches your home’s size, scope, and condition.
Additionally, there are two distinct pricing strategies for listing your home: pricing aggressively or pricing to sell. Although sellers understandably expect top dollar for their homes, listing above market value can have drawbacks and consequences.
Informed buyers know the most recent sales in a specific neighborhood. If a home is priced above these recent sales, especially with a slight downward trend in median home prices, demand decreases. Extended days on the market can tarnish the home’s perception, similar to an empty restaurant.
Conversely, buyers are drawn to deals that seem exclusive. Pricing a home slightly below market value can generate attention. A busy open house and a ringing phone create buzz. When potential buyers sense this excitement, they feel compelled to purchase the home before someone else does, often resulting in offers above the asking price.
Whether it’s the vibrant atmosphere of a renowned music festival or the strategic nuances of real estate, the principle of scarcity remains a powerful force. In New Orleans, the blend of diverse musical genres and unique culinary experiences draws people in, creating a buzz that’s hard to resist.
Similarly, in the housing market, understanding and leveraging scarcity can significantly impact the success of selling a home. By carefully considering pricing strategies and market trends, sellers can create a sense of urgency and desirability that encourages competitive offers.
Ultimately, both music festivals and real estate transactions remind us that the allure of something special — whether it’s an unforgettable performance or the perfect home — lies in its unique appeal and the demand it inspires.
Ryan Richards is the growth director and a luxury real estate agent at Keller Williams Mountain Properties. He is the founder and co-owner of the Bunkhouse, Vail’s first and only boutique hostel. You can find him at RyanRichards.com or 970-401-0720
