Mike Orr, from the Cromford Report , shared the following yesterday:
The average achieved sale price, as a percentage of list, is a significant measure of the market. When it drops we conclude the market is deteriorating and when it rises the opposite is true.
On September 25 the percentage for all areas & types within the ARMLS database hit 97.01%, exceeding 97% for the first time since September 4, 2006. This is a very positive sign. The number has been rising rapidly since hitting a low of 93.82% on February 5, 2009. The highest reading was 99.54% reached on June 5, 2005.
The biggest message this sale price to asking price ratio signifies is that home sellers are adjusting to today’s market, being more realistic about what the market will bear, and pricing accordingly.
I still see overpriced homes, in all price ranges, but especially in the over $500K range. Even that is changing. I am involved in a higher priced transaction, where the seller priced the home $100K less any of the comparable listings, where most have been on the market for more than six months. The home received multiple offers and was under contract in less than a week. Percent of sales price will be over 98% of asking price.
Savvy sellers know they can get a lot of attention with what may seem like an aggressive price.
- Showings increase. In the luxury home I mentioned above, there were three agents showing the house simultaneously.
- Offer prices are much closer to listing price, and may even go over. The most recent bank owned property I sold closed at over 40% of list price, with more than 20 offers.
- Buyers are more focused on completing the sale, knowing that there are others waiting to purchase if they cannot proceed. Competition can be a very powerful tool for a seller.
The Phoenix real estate market is ever-changing. Sellers are adapting and when they price to market and to their competition, their homes are selling at higher prices and more quickly.
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Fantastic write up. Everyone is trying to guess what the next year or two will look like in Arizona real estate and we are seeing all sorts of mixed messages and discussions about shadow inventory, another 2-3 years of declining values, etc…that it’s nice to just look at the facts and take a fact check. Thanks for the Monday morning fact check!