Don’t be fooled by every statistic and number shared in the real estate industry. With the plethora of numbers that are out there, it can be difficult to tell which numbers really matter when it comes to getting the best price for your home. Here are a few numbers that matter for sellers. In a future blog, I will talk about numbers that matter for buyers and numbers that don’t matter at all but are constantly used to impact consumer decisions.
Sold prices of comparable properties in the past 6 months – The prices of similar (style, size, location, age and desirable features), recently sold properties determine the price range in which the bank will approve a loan for your home. A similar home that sold a year ago does not matter unless your home is so unique there are no recently sold comparable properties.
Median sales price movement over the past 3-6 months – The direction of the median sales price indicates if the market is moving up or down. This should determine where in your market value range your list price must fall. If the median sold price is moving up, you might have success by starting with a list price at the top of your market value price range. If the market is moving down, you should price at the lower end of the range or slightly below to generate multiple offers. Otherwise, you will prolong the loss of value each week. I advise never pricing completely above your market value range. This can lead to a stale listing that nobody wants to see.
List prices of active competitive properties – The list price of active similar properties will impact the amount of traffic that flows though you home. This is because buyers will be comparing your home to a specific pool of properties priced similar to yours. Make sure your home is priced so that it falls among a group of homes that are similar or inferior in some way, not homes that show better or have more updates.
Absorption rate for competitive properties in your price range – The absorption rate tells you how many buyers in your price range are closing on homes each month. If an average of two buyers per month are closing on similar properties in your home’s price range, you should pay close attention if you get two or more offers in a 1- 4 week period. It is likely that you’ll be waiting a while for the next offer and it might not be as strong. This is due to the fact that your “days on market” number will be higher.
Traffic through your home – If traffic is strong beyond the first two weeks of listing activity, your home is probably priced correctly. Traffic varies based on the time of year, but your realtor should be able to tell you how your traffic compares to the traffic in other listings. A lack of traffic outside of the holiday seasons generally indicates your pricing is off. Also, in lower Fairfield County, 2 weeks without a showing and 10 showings without an offer generally indicates your pricing is off.
Mortgage rates – Mortgage rates and the pace of rate movements impact how many buyers can afford to buy your home. Lately, rates have been relatively stable but as they start to shift for extended periods of time, expect a shift in the size of buyer markets and/or a shift in home prices.
Feel free to share the numbers you like to follow when selling a home. I always appreciate your thoughts.