These days it is unusual to see a home lingering on the market three weeks after it is listed. However, even with the 299 residential listings that have sold since August 15, several of them were on the market for well over 30 days. As we take a closer look, many of these properties started out at much higher prices than they wind up selling for. In most cases, this is because the homes were not priced right in the first place, although sometimes it can be an indication of a short sale.
For the purposes of my analysis, I looked at homes between $500,000-$1,000,000 as there were many fixers below $500,000 and anything above $1,000,000 tends to be a longer market time anyway. There were 151 sales sold between $500,000-$1,000,000 between August 15-25, 2015. 17 of those homes were on the market 30 days or longer.
The days on market average for this group was 73 days with an original list price to sales price ratio of 92.8%. That means that if we look at the average, if a home had been originally listed for $700,000 and it sold for the average original list to sales price ratio, it would have sold for $649,600. Imagine you were this seller. How would you feel if you were now walking away with $50,000 less?
Here are a few of the more-challenging listings on the list of solds:
- There was one home on the market for 226 days. It wound up only selling for 77.2% of original list price.
- One home sold in 94 days. It wound up selling for 81.1% of original list price
- There was also one that sold in 83 days for 88.9% of original list price.
For this same time period, evaluating the same price point and area, the average market time was 16 days.
In this market especially, it is critical to price your property right as soon as it hits the market. You are much better off to not price the home too optimistically. Instead, pricing it at or even slightly under market in a market like ours encourages more buyers to take a look and possibly multiple offers which will drive the price up. Don’t be tempted to overprice and if you interview an agent who says otherwise, I encourage you to get a second opinion.
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