The market is nuts and everything is selling $100K over the list price!! We hear that quite a bit, but how true is it? Today I have some new visuals to help answer this question. If you’re not local, would your market look similar?
Two brand new visuals. What do you see?
Below the list price: This visual adds sales below the list price and at the list price. Remember, over 22% of sales sold either at or below their original list price last month. That’s actually an astounding number because it really should be about twice as high as that in a normal market. But here’s the big point. Not everything literally sells above the asking price – even in this crazy market.
Breaking down the numbers: I know it would be cool to see these types of stats throughout various price ranges. If someone hires me full-time to crunch numbers I promise I’ll share that stuff. For now here is a regional overview.
A property really sold $340K above the list price? Yes, a property in Granite Bay listed at $1,995,000 and closed at $2,335,000, which is a difference of $340,000. Most of the outliers paying hundreds of thousands over the asking price are in the luxury market. But remember, literally 0.77% of all sales went $200K above asking.
The big takeaway: It’s shocking to see nearly one out of every three sales go fifty thousand or more above the original asking price. That’s a sensational stat and clearly a symptom of a lopsided market. But let’s get technical. About two-thirds of all sales are not selling $50K above the list price and selling $100K above is such a small sliver of the market. I’m not trying to minimize how competitive it is. I’m just saying only 6.3% of the market was able to sell $100K above the list price, which means 93.7% of the market didn’t do that.
Closing advice: Let the stats form your narrative and always be careful about letting sensational sales form your perception of the market. And sellers, don’t aim for a unicorn situation that only happens in a handful of transactions.
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Questions: What stands out to you or surprises you above the stats above? What are you seeing out there in the trenches?
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Goes to show you how much “List Price” as a metric is trustworthy !! I Ona previous posting, it was stated that Agents rarely do a analysis any more !! Just put it up there and let the appraiser (if financing is required) prove the value !!
The list price is a starting point and hopefully it’s a somewhat reasonable point. The market will let everyone know. I don’t know that offers going so far above list lately is a reflection of agents though. I mean, sometimes it is when properties are priced way too low. But we have a wonky market and it’s just so imbalanced right now.
Great information Ryan. I wonder how many of those that sold under list price were properties with significant externality or obsolescence.
Thanks Gary. That would be fascinating to study. Buyers do seem very sensitive to location right now.
Interesting data. I’m a California appraiser who was looking at property in Salt Lake City, Utah with my son a few days ago for a possible job transfer. It is a crazy market there, too.
What would be interesting to me is if both these graphs were consolidated into one or two additional graphs with ‘Sold at List Price’ in the center, and a graph with the data bars for over/under sales prices paired on the same axis for direct comparison.
Thanks so much Jeffery. I like that idea. I do have a chart I put out each month that does some of this, but this could be cool.
I do believe the agents are a factor in homes selling above list price. I have had some me directly that they are pricing based on attracting out of state cash buyers and they know the property will not appraise. No CMA is being done and they are advising sellers to price it high due to expecting multiple offers were the appraisal, home inspection, etc. are all being waived.
Thank you Laryssa. That could definitely be a factor. Some properties are simply underpriced. This is a fact and it happens for a variety of reasons (sometimes it’s even a strategy). There is always a story to understand.
Agents encouriging overbidding ??? Whooda thought ???
I hear you, but this market is chaotic and buyers are overbidding on almost everything. It’s astounding to see nearly 30% of all sales going 50K over. Granted, some of this is legitimately due to pricing too low. But the market is simply lopsided and we have an environment where multiple offers and bidding wars are commonplace. I think buyers today have to step in and consider what a property is likely worth and what they might have to offer to secure the deal. These could very well be two different figures.
Just looked at the last few closings in my area (East Bay) and 3 of 12 were 1m over list. These are deals that closed in the last 24 hours!
They weren’t even listed particularly low.
That’s wild. The Bay Area is such a unique animal. I keep telling people that the rest of the country experiencing a wonky market lately now has a small taste of what the Bay Area market has been like already. I’m glad the Sacramento market is a bit more tame.
I do recall reading an article about a property that went one million over list price in the Bay Area and I’m sure that got a ton of clicks. I figured that was a pretty big outlier. Are you saying that’s a bit more normal? Seems wild to see too many of these, but I don’t really know since that’s not my turf.
It is happening regularly – some of it is tactical listing strategy, some is out of area listing agents who don’t do their homework and some is pent up demand fueled by buyers with available cash resources who are tired of making offers that are rejected. It tends to be in the mid-price range of any given area where demand is strongest. It is wild.
Thanks Alison. Wild to hear.
In a recent transaction, we got our offer accepted for $50 over asking. Yes… $50. NOT $50K. 🙂
I really believe it also has A LOT to do with all the relationships – seller, buyer, listing agent, selling agent. If everyone is in it for a ‘win-win’, or to me more specifically, ‘win-win-win-win’ and they are all doing their parts really well – going above and beyond – to make the transaction as smooth as possible then everybody… wins. 🙂
Thanks Andy. There really are many factors here. I have to ask. Why did you offer $50 over asking?