Choosing the right comps can make all the difference in a softening housing market. I’m having SO many conversations about listings that aren’t moving, so it’s key to back up and get some perspective on comps. Any thoughts?
UPCOMING SPEAKING GIGS:
6/26/25 Comps & Adjustments (3 hours)
7/17/25 Jamie Pierroz Event (private)
7/22/25 Investor Event (TBA)
7/25/25 Prime Real Estate (private)
8/6/25 Realtor Event TBD
9/10/25 Windermere Sacramento
9/16/25 Culbertson & Gray (private)
9/24/25 Keller Williams Roseville
9/26/25 PCAR
9/30/25 Elk Grove Regional MLS Meeting
10/15/25 EDH Coldwell Banker (private)
10/21/25 Orangevale MLS Meeting
11/4/25 SAR Main Meeting
SELLERS NEED TO CATCH UP TO BUYERS
This meme is a good way to describe the real estate market. I think buyers are ahead of sellers in understanding the housing temperature because they spend so much more time scouring listings, waiting for the right home, and making offers. Moreover, buyers have gained power in recent months since the pile of active listings has grown while the number of buyers has shrunk. So, sellers need to catch up to buyers rather than expecting buyers to come to them. It’s time to get in tune with how picky buyers are about price, condition, and location. What are you going to do to stand out and entice a smaller pool of buyers?
FIVE THINGS TO KNOW ABOUT COMPS TODAY
1) Comps tell us about the past (not the present):
Comparable sales are like historic artifacts that tell us what the market used to be like. So, if I’m looking at a sale that closed 40 days ago, that property tells me more about the market from 70 days ago when the home got into contract. Are prices still the same today? In a market with some brewing downward price pressure, that’s the question. In short, don’t get stuck on the past, and recognize closed sales represent the past more than anything.
2) Give strong weight to properties getting into contract:
What is the market like right now? Look to properties that are actually getting into contract – the pendings. Forget about listings that are lingering and lofty sales from the past. If prices have softened since the highest comps from the spring, then fixate on what buyers are willing to pay right now (which is seen in the pendings). Of course, we might not know the exact contract price of each pending, but if we’re seeing pendings are only getting into contract when priced lower than recent sales, that’s telling of a softer market. Of course, we might see pendings at the same exact price level too, which is symptomatic of flat prices. By the way, about 34% of pendings in June so far have needed a price drop before getting into contract in the Sacramento region. This also means 66% did not need a reduction. On average, properties reduced by 5.7% before getting into contract. And yes, this is a Jennifer Aniston image I made with AI from X (Twitter).
3) Don’t price to other overpriced listings:
There are so many overpriced listings, so be careful about pricing to those unless your goal is not selling. I find some sellers get concerned about pricing lower because they don’t want to be a lower comp in the neighborhood, but individual sellers don’t have the power to keep the market high or make it go low. Take the pressure off yourself because you don’t control neighborhood values. Remember, one high or low sale doesn’t make or break the market. My advice? Do what you need to do. By the way, 43.5% of active listings have had a price reduction in the Sacramento region.
4) You’re not giving up value if you lower the price:
Some sellers struggle with getting attached to the original price, so they feel like they’re giving up value if they lower the price. Remember though, if it was never worth that amount, you’re not giving away value because you never had that value. Keep in mind, most of the time properties don’t end up at exactly the original list price. For instance, in the Sacramento region last month, only 14% of listings sold at exactly the original price.
5) Take negative price stats seriously:
We’re starting to get some negative year-over-year declines, and my hope is sellers will find strong motivation from that. This is where some listings are going to price lower than recent sales if current pendings are getting into contract at lower levels. All that said, we are NOT in a market with rapid price declines like 2007, so it’s important for buyers to be realistic about their power too. Also, don’t be rigid about declines. For instance, the median price being down by 1% doesn’t mean value is down by that exact amount in every neighborhood and price range. Look to the comps to understand where value is at.
By the way, this is one of my favorite visuals from ResiClub. We’re seeing more locations with year-over-year declines, so the orange part of the graph is growing. We’re starting to see some California cities join the list too (not just TX and FL).
And buyers, here’s a look at local competition over the past two weeks. This visual shows the number of offers in pending contracts by price range from MLS data. About 62% of pendings had one offer while only 4.5% had five or more offers.
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LEAVING COMMENTS: The captcha is not working perfectly. If you open up a new browser, that should solve the issue. It’s been a problem to comment when clicking from my weekly email. My apologies.
Questions: What else do you think is important when looking at comps today? And what are you seeing happen with prices when pulling comps? I’d love to hear your take on things.
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