Alison & Raul Elizalde

Sarasota Realtors

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Selling Price vs. Listing Price

Published statistics state that Sarasota homes sell for 93%-95% of their asking price. Don't believe it.

(By Raul Elizalde, 11/06)

 

Statistics from the Sarasota Association of Realtors state that condos and homes for sale in Sarasota end up selling at 93% to 95% of their asking price. Strictly speaking, this is correct, but it is also misleading. The main problem with this number is that the sales price is computed as a percentage of the last listing price – the one just before the property went under contract. This ignores any price reduction that might have taken place after the original listing date. Sellers would be quite mistaken if they expect their properties to sell at a 5% to 7% average discount from their asking prices.

 

I have computed instead the sales-to-original-listing-price ratio and observing how it has evolved with time. This is an improvement over the published numbers because it takes into account all intervening price reductions after the first day of the listing.

 

It could be further improved by capturing those instances where sellers relist their properties at a lower price. Using instead the original price of the very first listing would give the most accurate picture. This is especially true today, when relisting at a lower price is an increasingly common event. Therefore, the sales-to-original-listing-price ratio that I present here is somewhat optimistic. The true ratio is likely to be even lower.

 

 

The graph above shows the 30-day average of the sales-to-original-price ratio since the beginning of 2005 for single-family Sarasota homes. As one would expect, the final sales price has decreased in recent months as a percentage of the original listing price. It is also much lower than the 93.5% published by the Sarasota Association of Realtors.

 

For all Sarasota homes, the sales price currently averages 89% of the original listing price. What is striking is that Sarasota homes priced above $1 million are currently selling at around 82% of their original listing price. Proportionally, higher-priced homes are enduring larger price cuts than lower-priced homes.

 

This fact needs context. I suspect that luxury or waterfront homes in Sarasota have experienced higher appreciation than others in the last 2 or 3 years. If that is the case, the current larger price cuts still leave the owners of luxury Sarasota homes better off than those holding more modest properties. Also, homes that come to market properly priced do not necessarily need to suffer such large discounts in order to sell. It is important to keep in mind that these ratios are averages; some Sarasota homes might experience much larger cuts, while others - priced properly and in excellent showing condition - sell much closer to their asking price.

 

Still, this spells opportunity for buyers. Sellers are unquestionably willing to negotiate and accept larger price reductions than at any time in the last few years. Those who are looking to buy a home in Sarasota but want to wait for an even better environment risk facing less favorable conditions ahead.

 

When it comes to knowing the Sarasota real estate market, Alison and Raul Elizalde have the expertise and knowledge to help you see where you stand when negotiating your real estate transaction, whether you are buying or selling a property. Our track record, added to the unsurpassed reputation of Michael Saunders & Company as the premier real estate company in Florida's Gulf Coast, give you the peace of mind you deserve. Alison and Raul have been named Best in Customer Satisfaction by an independent research company.

 

Call us today at 941-350-7904 for a consultation, and visit our website, www.SarasotaProperty.info, for monthly updates on the Sarasota real estate market.