Monday, August 9, 2010
"% Sold Price to List Price" - Why Is This Unreliable Data Still Included In Sales Reports?
In a recent Hook update, the "Asking Price" for 195 Georgetown Road is noted as $299.9k, and the "Selling Price" is noted as $269k. This would mean the "% Sold Price to List Price" is 90%.
This is completely inaccurate: the original listing price for 195 Georgetown Road was $379,900. This means that the "%Sold/List" is actually 71%.
If you read RE sales reports, there's always the stat about how close percentage-wise the sold price is compared to the list price. This is a way of giving buyers and sellers "confidence" that properties have been priced "correctly" by the real estate professional--as in the property is actually "worth" this amount at "fair market value" (whatever this is, nowadays).
In the Charlottesville Area, the "%Sold/List" number is typically in the upper 90's (see here and here for recent examples).
The problem? This is a highly unreliable data point, because it only takes into consideration the last listing price. Properties often have unannounced $10k-$20k reductions as they chase down the market, let alone those price reductions that are declared.
This blog looked at examples of the sold/list phenomenon in a previous post, Asking v Selling Prices.
Because nowadays so many properties have price reductions (of the few properties that are actually selling) a more realistic picture of sold pricing would emerge by using the original list price. This would be far more helpful to sellers as well as buyers.
What Constitutes a Lowball Offer in This Area?