The Denver Metro market continues to lead the country in the number of sales with price reductions. To put this in perspective, 44% of closed sales in June had price reductions. The correlation between price reductions and the final sale price has always been an area of interest to me and it's been a while since I had the time to run an updated analysis on the impact of price reductions for the current market. Here are some of my takeaways from my analysis of Q2 closed residential sales in the greater Denver Metro real estate market.
Time is Money! In June, homes with price improvements had an Average DIM of 42 days and a Median DIM of 40 days while homes without price reductions had an Average DIM of 11 and Median DIM of 5 days.
The Average list price was reduced by $36,811 and the Median list price was reduced by $23,900 prior to going under contract in June.
The Average concession in June for homes with price reductions was $6,484 and the Median concession was $3,900 compared to an Average concession of $4,672 and Median concession of $1,500 for homes without price reductions.
In June, the final Average closed price for homes with price improvements was $48,937 lower (not including concessions) than homes without price improvements and the Median closed price was $29,000 lower than homes not having price improvements.
This translates to the final closed price being an Average of $12,425 below the already reduced list price and a Median $5,100 below the reduced list price (not including concessions) compared to homes without price reductions. In fact, 97% of homes with price reductions sold below the reduced list price compared to 30% of homes with no price reduction that sold below the list price. The average close price for homes without price reductions was just $299 below the list price while the median sale closed at the list price.
This highlights the physiological effect price reductions can have on buyers. Based on the data analyzed, buyers were more likely to offer below the current list price for homes that had at least one price reduction compared to homes that were priced competitively with no reductions.
While it’s complete normal to have a fear of leaving money on the table, having unrealistic price expectations can cost you in the long run!
Are you a home owner and thinking about selling your home? A pre-listing appraisal is the most accurate way to determine a listing price that is supported by current market conditions for a fast sale. Please contact me for options if you would like to learn more about the pre-listing appraisal process.
If you are a real estate agent with an upcoming listing, I'd love to perform a pre-listing appraisal for you! This is a great tool for you and it can help your seller have realistic expectations for getting their home sold. Do you have a listing that has sat on the market and needs a price improvement? Or, has your listing already had 3 price reductions and you still aren't getting interest? If so, then I'd love to chat about how an appraisal can help get your listing sold!

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