We have a problem with comps in today’s real estate market. Well, technically the comps aren’t the issue. We’re just not always looking at them in the right way. Let’s talk about that today. Also, I have some fresh stats to help show how much prices have gone up through the years. Skim by topic or digest slowly.
UPCOMING SPEAKING GIGS:
7/25/25 Prime Real Estate (private)
7/31/25 Big market update & panel at PCAR
8/6/25 Realtor Event TBA
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
10/23/25 CREB Meeting (TBA)
11/4/25 SAR Main Meeting
12/9/25 Downtown Regional MLS Meeting
12/10/25 SAFE Credit Union (TBA)
THE PROBLEM WITH COMPS TODAY
If three homes in a neighborhood closed last month, do they tell us about the market right now? It’s tempting to say yes because the sales are so recent, but these properties tell us more about what the market used to be like a few months ago when they got into contract. If the market has changed, these sales are more like historic artifacts that show us what prices used to be like. What is the market like right now? We have to look at what’s happening with pendings and listings to get a pulse on that. In other words, what’s getting into contract today? That’s the biggest clue into what buyers are willing to pay at the moment. We still give strong weight to actual sales, but if the market has gone down in value, we need to give stronger weight to what we’re seeing in the listings and pendings. It’s sort of like stock prices. I’m going to want to look at what a stock was worth a few months ago, but what is it worth today? That’s the question I ask when buying. And in real estate, today’s prices are seen in the pendings and listings.
QUICK TIPS ABOUT PULLING COMPS
1) FOCUS ON THE CONTRACT DATE: Definitely give weight to sales because they actually closed, but ask yourself how much the market has changed since those properties got into contract. Remember, the price was basically established at the contract date (and some negotiation while in contract), so we’re going to focus on the contract date more than the closed date when trying to figure out how different the market is from the time the price was established. In a softening market, if you use a sale from the spring, don’t be afraid to give a negative adjustment to the property to bring it down to what buyers are willing to pay today.
2) LOOK FOR A PATTERN: Don’t hang your perception of value on just one property. We want to look for a group of sales, pendings, and listings. In other words, we don’t want to view one lower pending and base our entire perception of value on that property. That’s not enough data to show a trend. What if that one pending was priced low to generate interest? Or what if it smelled like 20 cats? This is why we want to look for a pattern instead of just one example. It would be like me going to the mall and seeing a teenager sporting a sweet mullet. Does that mean mullets are back in style? Or is it an isolated incident? Seeing one bro with “business in front and a party in the back” isn’t enough to say it’s a trend.
3) GO OLDER & WIDER: There aren’t many sales today, so we may have to look at what’s going on in competitive neighborhoods to wrap our minds around value. We might also have to look at much older sales in the immediate neighborhood to understand how prices have moved. I wrote more about the challenge of comps in 2025, and we simply need to spend more time digging through older stuff, newer stuff, and competitive areas. If you’re only spending five minutes and it’s working, then it’s time to sell an eBook and get rich. For the rest of us, we’re going to be in the comp trenches for significantly longer.
THIS ISN’T ANYTHING NEW
The truth is we always see the current market in the listings and pendings, so it’s not like this is a new phenomenon at all. I think it just feels like it’s a new thing when prices are softening. For some sellers though, this actually is new because they aren’t used to thinking about value like this. Moreover, it’s really hard to price below a neighbor who is being totally unrealistic.
HOW MUCH HAVE PRICES RISEN?
With so much talk about prices starting to soften, let’s pause and ask how much prices have gone up. Here’s a look at median price change. Of course, median change doesn’t always perfectly represent actual value change, but it’s at least something to get conversation started.
For sellers, what do you want to do with your equity? Where do you want to be in life? Who do you want to do life with? What possibilities exist for you ahead?
NOT EVERY AREA IS EXACTLY THE SAME
Here’s a sample of some different areas. This is a good reminder that not every location has the same exact trend. So, when we say prices are down modestly today, that may or may not apply exactly the same to every area and price range. Also, percentages can sound crazy if the first number is really low, so be sure to look at the dollar amount too (Oak Park).
NOTE: Some neighborhood and price ranges could have different growth than what we see for an entire city. I saw this recently with a property in Folsom. An owner bought about ten years ago, and this higher-end neighborhood rose by $400,000+ even though the county trend was maybe half of that.
IMPORTANT REMINDERS ABOUT PRICE STATS
1) NOT PERFECT: Median price change doesn’t apply perfectly to every single house and neighborhood. So, a $160,000 change in Sacramento County since 2020 doesn’t automatically mean we’re going to see exactly this amount in the comps. Maybe it’s higher. Maybe it’s lower. In fact, my observation is the high-end grew significantly more than the median price in the county, so if you’re expecting to see county trends play out at the high end, you might actually undervalue a property.
2) DON’T BE RIGID: It’s key to look to the comps in each neighborhood. In other words, don’t be rigid about imposing median price change on an area without looking up actual comps. The same holds true today when we see the median sales price in Sacramento County is down almost 2% from one year ago. Does that apply equally to every location and price range? Probably not. Look to the comps to know for sure. The truth is market change doesn’t hit every area exactly the same even though all ships tend to rise and fall with the tide.
3) DON’T BE A HATER: Sometimes people are negative about the median sales price, and I sort of get it because it’s not a perfect metric (there is no perfect metric or price index). The problem is if we start to see more sales at the top of the market, that can make the median sales price increase. So, maybe the market didn’t really go up in value. It could just be more at the top and less at the bottom. Here’s an example of that happening.
But here’s the thing. Sometimes people hate on the median, but they don’t offer an alternative, which seems really unhelpful. What should we look at for the local market instead? Are you telling me the national Case-Shiller Index? Does that apply to Sacramento or wherever? I don’t like that idea. I do like looking at Zillow’s price index for Sacramento and other indexes focused on metro areas. Interestingly enough, Zillow’s price index in June is currently showing the same exact trend as the median sales price in Sacramento County.
My advice? Look to traditional metrics like the median or average, and check out some price indexes too. Keep in mind a price index has the same problem though. Does it mean every single property and price range is down by 2%? Nope. Ultimately, we have to look to the comps instead of rigidly apply the median (or a price index) onto every single property.
On that note, here’s my favorite image from ResiClub that shows
Zillow’s price index for various metros. If you’re aren’t following Lance Lambert of ResiClub, you are missing out. If you are in one of these locations, do you think Zillow’s index represents the trend? It does for Sacramento, but I’m curious to hear if it’s spot on for other places.
Thanks for being here.
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 are you seeing with comps right now? Are prices up, down, or sideways? What point stands out to you the most? I’d love to hear your take.
If you liked this post, subscribe by email (or RSS). Thanks for being here.