While there are currently just under 14,000 listings in the Wake, Durham, Orange and Johnston counties, there were 1,339 closings during the month of October. How did these sellers produce a buyer at an acceptable price? 62 of these sellers had the correct price as defined where the original list price equaled the final list price. These houses sold in an average of 29 days for an average price of $187,000 and the final list price/sales price ratio was 100%. This indicates the strength in our market of housing priced below $200,000.
So what do you do if your house is priced in the upper ranges? Well you get the axe out and lower the price. There were 42 re-sale sellers during the month of October with housing priced above $500,000 that were able to produce buyers. The average house took 105 days to sell, sold for 95% of final list price and 89.5% of original list. This indicates a large degree of seller flexibility. This flexibility is further exhibited through analysis of current inventory. It appears that the current crop of price dropping sellers with housing listed at 500k and up has dropped price by an average of 13% from original list. Applying the 95% sales price to final list price ratio would indicate that a 20% cut is in order to produce a buyer in this price point.
While the numbers regarding percentage price cuts indicate that sellers are flexible, you should consider your prior purchase price which will help determine your pricing flexibility. If your home is priced at 20% or higher above what you paid for the home, you have pricing flexibility and in today’s market, you’ll need to exercise it. Looking at a sample of homes in the $500,000 and above price range, a comparison of the current list price with the most recent purchase price found that the average seller has their house priced an average of 11% above prior purchase, indicating little pricing flexibility. IF you have pricing flexibility, I would strongly urge you to use it and reduce the list price of your home, if it has been on the market more than 30 days. For those of you who DO NOT have pricing flexibility, let me encourage you to take your home off the market and enjoy the holidays without the stress of keeping your home in perfect showing condition. In the Raleigh/Durham area, we are fortunate to have a market, although weakened by negative media attention and the general overall economy, as healthy as it is. I believe that real estate sales will show a strong rebound in early 2009 as consumer confidence increases. The resale market should show an even stronger rebound as builder’s inventory levels begin to fall as a result of current discounting of the current homes and a slower rate of new construction.
The Freeman/Davis Home Team offers a special home pricing analysis called the “Residential Value Analysis.” Our program takes into consideration, inventory, absorption rate, replacement cost, appreciation and risk assessment. This program is far superior to the current “Comparable Market Analysis” offered by other agents. We would be happy to discuss this with you and show you our Ten-Step Marketing Plan. Visit us online at www.FreemanDavisHomeTeam.com and www.HomeSearchRALEIGH.com or call us at 919-649-6638. With the heart of a teacher, we’ll educate you on market conditions and values. Our goal is to help you make good decisions.
Our thanks to Stacey P Anfindsen of Birch Appraisal Group in Cary for his expert analysis of the real estate data and TMLS information referred to in this article.