Studying March’s stats this morning and I discovered something that I thought was very interesting.
I have stats on all kinds of aspects of the market in any identifiable sub-market within Realtracs coverage area (which is HUGE by the way). Two stats stood out that I wanted to point out. They illustrate something I tell people often. Right pricing moves peoples’ minds. Preconceived notions will stop someone’s mind as well. Check this out.
I’m looking at stats from last March compared to this March. If you will remember, last March our market was still moving at a frantic pace. We were ramping up for Spring and lots of activity was popping. To illustrate this, last March we had a 3 year high of 9,175 pending sales in Rutherford County. This March we have the low for that same 3 year period at 6,238.
The interesting numbers are the percent of list price properties closed at vs. the percent of original list price properties closed at.
In March of 2022, percent closing price is of list price registered at 102%. Most everything was going above list. Percent of original list price came in at 102.4%. So this means that some list prices actually went up while listed and then went under contract! We saw this happen on new construction quite a bit. They started the project, listed at a certain price. Then, as the project moved through phases, costs went up so price went up. Many people wait till the project is at a certain level of completion before writing a contract (they want to physically walk through the house at least at framing). We also saw agents increasing the list price when they got an over asking offer. This was to try to help give them an upper hand with the appraisal process (though I would say it didn’t give an accurate picture of what happened).
This March is a very different (though more normal) picture. Percent of list price is at 100.1 but percent of original list is at 99.1%. This picture is definitely a more historical normal situation. House is listed at $——. Doesn’t move fast enough. Owners drop the price and it sells immediately. Oftentimes the price drop isn’t even a gigantic one (thus the 0.9% below original stat). From my experience, we had a LOT more conversations that included “we can try that price, but I think you will need to drop it to get it done”. We also had a lot of situations where one drop suddenly spiked activity and ended in multiple offers. I had one occasion where the multiple offer situation drove the price back to the same price as originally listed!
What does this mean? It means that how I price your home sends a message to a buyer. If your philosophy is that we list at $500,000 to get $475,000, that still doesn’t work as often as it (probably) should. It also shows (the numbers and my experience) that sometimes, people wait for the first price reduction right now. I’ve seen that scenario play out several times lately. Our Days On Market support that as well. Last March, the average DOM was 8. This March, 18. Probably the most logical and easy takeaway is that if a home is priced right, it will sell. And it will sell pretty quickly.
