In the past few weeks I noticed that many sellers have lowered the list price of their homes. Does this indicate a slow-down of our booming real estate market, or were these listings simply overpriced? I was curious. So, we looked into price reductions in a few neighborhoods to find out if there’s a new trend.
Analysis of List Price Reductions
Here’s what we did: we looked at recent home sales in popular neighborhoods in Dublin and Clintonville and compared their Original List Price to the Final Sales Price. In addition, we also prepared charts for Olde Towne East and Scioto Reserve in Powell. We created charts that show by how much the final sales price was higher or lower dependent on how long a property was on the market (days on market – DOM).
Then we downloaded active and contingent listings in the same neighborhoods. We compared the Current List Price to the Original List Price to see by how much the price was lowered (or increased) since the listing was put on the MLS.
How to Interpret the Charts
The vertical bars in the charts below show the average increase or decrease of the list price of all properties that sold after a certain number of days on market.
For instance, in the first graphic (Dublin) homes that went in contract 6 days after being listed sold for $16,800 more than list price. After 41 to 60 days on market homes sold for $25,267 less than the original list price.
The next graphic compares the Current List Price to the Original List Price. The average sales price of homes in both neighborhoods was around $330,000.
You can see that some list prices have increased. That’s the case when sellers accept an offer above list price and the agent changes the price on the MLS.
In the first chart (Dublin) it appears that pending contracts resulted in a $12,300 increase in list price at day 6, while sellers began lowering asking prices after just 8 days. On average, the list price has been reduced by $10,833 for properties listed between 41 and 60 days.
What Do These Charts Tell You?
- Listings that sell on the first day do not yield the highest price for the seller. That’s why my 4 Day Marketing Blitz is the best strategy for getting above list price offers.
- Sellers are currently pushing the limit when pricing their homes. As overpriced listings do not attract buyers, they quickly reduce the asking price after 8 or 9 days.
- If your property does not receive offers within 8 days, it’s probably overpriced, and you’ll likely sell below list price.
This is the time of the year when sales slow-down. Kids are out of school, families go on vacation, and most buyers who are moving for school districts already purchased a home.
If you are considering buying, NOW is a great time with less competition. Also it’s a slightly higher inventory than during the mad rush in spring. If your home is currently listed, you need to be patient. The market will pick up again towards the end of summer and there’s still a tremendous demand.
If you or someone you know is planning to buy or sell this year, please feel free to give me a call at (614) 975-9650, and I would love to sit down and discuss your property with you.