GIGO – Garbage In Garbage Out; the phrase has been around as long as we’ve had computers. As you no doubt already know, a computer will process any data you feed it – without a care in the world as to whether or not the data is accurate or flawed.
On another page on this site you’ll find a post titled; “What the Typical Home Looks Like in 11 of the Most popular Neighborhoods of Northwest Rochester.” In that post you’ll find statistics about average home sale prices and year over year price increases.
In compiling the information for that article I utilized MLS generated sales statistics for the entire area of Badger Hills; north to south from 19th to 41st Streets NW and east to west from County Road #22 to the western edge of the developed area of the neighborhood.
Within the above defined area there are town homes, existing single family homes and new construction single family homes. Wanting to write a monthly market trends update I started looking at the data again and realized that including – within the averaged statistics – sales of town homes and new construction homes, skewed the results for the largest number of those potentially interested;
- people living in existing single family detached homes
- people interested in buying an existing single family detached home
Total Homes Sales
This graph shows the number of single family detached home sales month by month, from January to September of 2014 versus the same months of 2015.
As of the end of September total existing home sales in the Badger Hills area has increased by 25% – from 48 total sales in 2014 to 60 in 2015.
Interesting to note I think, the early start to the spring market in 2015 that just continued to increase throughout the summer and then dropped off dramatically in September.
List Price vs Sale Price
- Average original list price
- Average list price at time of sale
- Average Sale Price
Entering the sales data into a spreadsheet it was interesting to note that there seemed to be a definite correlation between homes that went through a price reduction, their total days on market and their eventual percentage of original list price received.
Those that went through a price reduction always had the highest days on market and received the eventual lowest percentage of original list price.
I suppose that only makes sense but I think also illustrates the need for proper pricing from the outset. Listing your home for a higher price – so you can come down during negotiations – invariably seems to result in extended marketing times and lower percentage of sale price received.
Average Sale Price – Month to Month
This final graph illustrates a month by month comparison – 2014 vs 2015 – of the average sale price each month. (There were no sales within the neighborhood in January of 2014.) In hindsight an annual comparison of average home prices probably makes more sense. (but the graph wasn’t as cool)
I was looking for an indication, as example, that maybe higher priced homes would seem to sell better at a particular time of year; the data doesn’t support that.
It does appear the higher priced homes sold better in the early spring and late summer of 2014 which would make sense – typically those times of year being a more active market. But the spring and summer hypothesis isn’t supported by the 2015 data.
When you list your home for sale your Realtor should prepare a net proceeds sheet for you. At that point they should also tell you to expect the buyer to ask for seller paid closing costs. I always like to prepare my sellers for worst case scenario with respect to their net proceeds from the sale.
When I was analyzing the sales data for this article I also tracked seller paid closing costs/concessions. Average seller paid closing costs – over all of the sales analyzed – were;
- $2946.24 in 2014
- $2341.43 in 2015
But this is another case where statistics don’t really give you the whole story. Rarely were seller concessions less than $4000. In fact of all the sales analyzed in only eight of the transactions over the two years were seller concessions under $4000.
It was either all or nothing so to speak. In 2014 in those transactions where the seller paid concessions the average was $5,032.00; in 2015 the average was $4,957.00. Considering an average sale price of around $235,000 indicates average seller concessions – when the seller pays concessions – of around two percent of the sale price.
Days on Market
I also tracked days on market which I alluded to above when talking about percent of list price received. Days on market and percent of list price received definitely go hand in hand.
In June of 2014 there were five sales that received 100% (or more) of original list price and sold in less than 30 days. Pretty good indication of a hot market wouldn’t you say? In 2015 there were 20 home sales in Badger Hills that received 100% or more of original list and sold in less than 30 days.
In most, but not ever case, the highest percentage of original list is received in a minimum number of days on market. I looked at 13 sales that were on the market for more than 60 days before selling; the average percentage of list price received dropped by 6.4% to 93.6%.
On a $235,000 home that 6.4% equates to $15,000. But that doesn’t include the hassle to you of an extended marketing period. Plus there’s the potential to move – time-wise – into an entirely different market. Interest rates could increase which could easily put a damper on market activity, thereby extending your marketing time and decreasing your percentage of original list price even further.
Please understand, statistics are – primarily – averages. Every house and every situation is different. Whether you’re a future home buyer or seller these are just some thoughts to help you through your decision on where to price or what to pay, for your home.
The Current Badger Hills Market
As of this writing, during the last week of October, 2015, MLS stats reveal the following for the Badger Hills area;
- There are currently six properties on the market in Badger Hills
- Two single family detached homes and four town homes
- Both of the detached homes have been on the market for a little over 2 months
- One is priced at $269,900 and one at $307,400
- Both have gone through price reductions
- There are two pending sales; one at $219,500 and one at $269,900
For more detailed information about the Badger Hills area and to see homes currently on the market in that neighborhood CLICK HERE.