I noticed another house get relisted today. This house was listed today (MLS #8039896) at $299k, down from it's previous listing at $314k (MLS #8035485).
Let's assume it sells at the lower price. The spread between listing and asking price will show as 0. But if it had remained at $314k and just the price reduced the spread would be 6%.
So for those trying to chart the spread between listing and selling price as an indicator of where the market is moving, we now have another skewed statistic.
I haven't had a lot of time to think this through, so what are your thoughts? Is this meaningful? Any Realtors care to comment?
Thursday, April 24, 2008
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5 comments:
Tsk tsk. Do you really have to ask this question?
pdx, no new news with what you're commenting on. has been going on forever. probably will continue on forever.
is it right? that's a whole other question.
Asking prices don’t have anything to do with market value – selling prices are the numbers that matter. Sellers set the asking price based on a market analysis provided by the listing agent, and often sellers want to get more than the current market will bear.
Smart agents won’t take overpriced listings, but often you just can’t predict how the market will respond, especially in today’s marketplace.
That said, to determine where the market is going you have to look at current selling prices versus recent closed sales of similar properties in the area. What a seller initially asked (i.e., "wished" his property was worth) is irrelevant to actual market conditions.
Bottom line, you need to track closed selling prices to determine current market values. Relisting with a new number at a lower price is not a conspiracy to make the market look better than it actually is. Agents have access to the listing history and good agents use it to get the best deal for their buyers and to ensure that they aren’t overpaying in the current market.
I guess I wasn't too clear in my original post. I'm well aware of the practice of relisting a house. Personally I think it stinks, but most buyers are smart enough to see through it (one triplex we looked at last year had been on and off the market every year for the past 4 years, he was obviously fishing for a sucker and we wouldn't bite).
I'm also well aware the selling prices are the only true measure of a market, asking prices are relatively meaningless.
But when you're trying to measure how desperate sellers are getting it gets difficult if you can't track the spread from original asking price to final selling price due to multiple re-listings.
Chris, care to comment?
Pdx, I don't quite see it as desperation as much as the inability of a seller to understand where the market is. And then they start chasing it down.
Most sellers wish to maximize their profits of course. But many fail to understand that by initially offering their home for sale at a very competitive price, they will increase showings and sell it quicker. And quite possibly get multiple offers.
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