Sacramento Real Estate Blog

A few days ago I wrote a post that Jeff Brown liked, wherein I took a brutally honest look at what to do if your home isn’t selling. Jeff Brown is a very nice guy and always has a kind word for me, and he writes about real estate investment.

Anyway, when I was finished with that post, and as I was looking at this month’s market numbers, it ocurred to me that I hadn’t proved “It’s the Price, Sweetheart” to anyone’s satisfaction. So I thought it would be fun to show the average list price of homes that sold versus the average list price of homes that expired for some period — oh, I don’t know, six months or so. As I’m writing this post, I haven’t yet looked the numbers up, but let me guess that in each and every month in the last six, the first number will be substantially lower than the second.

Those of you who are saying to yourself, “well DUH!” have never gone on a real estate listing appointment. Trust me on this.

So stand by while I prepare the numbers….

Well, I decided to go for broke and check out the last 13 months instead of the last six. So I’ve included all of 2006 plus January of 2007. The following table shows the numbers, and, on average over the whole period, homes that expired were listed at 6.4% higher than homes that sold, at the time they expired. I emphasize this because there may have already been a list price reduction before the listing expired, and we’re also not showing final sold price, here, which typically runs about 2-4% underneath list in this market. Between those two elements, it’s probably a fair guess to say that when a listing expires it probably started out about 10% higher than where it should have been.

Here are the numbers for homes sold in Sacramento County during this period, according to Metrolist MLS, barring any typos on my part. In each case, we show the percent difference as how much higher the expired price average was than the sold price.