Are Prices Still Too High?
by murray balkcom, GRI, Realtor
dreamBIGproperties.com
It’s just my observation, but it seems that most listing prices, on average, are still too high, and Emerald Coast Association of Realtors (ECAR) has some statistics to back up what I see. Looking solely at detached single family homes in South Walton for the month of January 2010, we find that the average sales price is 91% of the list price (ie- 9% “discount” off the list price). It is reported to ECAR that the median sales price was $455,000 (Median sales price is the price where half of the sold homes were sold above that price and half were lower.) However, looking at new listings which came on the market during Jan ’10, we find the median listing price is $569,000, which equates to 20% higher than the median selling price. If on average, we are seeing the selling price about 9% off the list price, this would tend to indicate that we have a gap, and statistically speaking, we will not be seeing many of these new listings sell, unless the property is outstanding enough to draw attention and the seller is willing to negotiate down to market price.
Inventory continues to trend down slightly as the over-priced listings are either withdrawn or expire. It shouldn’t be surprising to learn that on average, the median price of those listings which were withdrawn during January were listed at a price 32% higher than the median selling price. Also, the median listing price of those listings which expired in January was $604,950 (33% higher than the median selling price). Those listings which expired or were withdrawn during January, were on the market on average for more than 400 days. The listings which sold in January, on average, sold in 291 days.
291 days is a long time to go from listing to closing. There are some properties which are coming on the market, priced to sell and we are seeing many of them going under contractquickly because they are priced right. We should be seeing the number of days on the market closer to 90 days, so this further backs up my theory that most of today’s inventory is over-priced.
If sellers truly want to sell their property, rather than just having an advertisement in their front yard for their Realtor, they need to get the price right and then be willing to adjust as the market changes, which is almost weekly around here. The sellers who are willing to work to find that right price, are the ones who will be selling sooner, rather than later. Speaking on behalf of Realtors everywhere, rely on the professional real estate agent you hired to be the pro and get that price right, and you will be successful with your sale.
Keep in mind, these are just stats based on a broad picture of our local market, but they are definitely worth noting if you are serious about selling. Ask yourself, “Is the price of my property too high?”