Price Disconnect Between List Price and Selling Price

Full Video Transcript Below

Real Estate List Price vs. Sold Price...Why Such A Disconnect_

Alice Lema: [00:00:00] Hey everybody. Welcome back to the weekly podcast. So glad you could join us today. I'm Alice Lema. I'm a broker in Southern Oregon with John L. Scott Real Estate. And today the podcast is going to be all about the disconnect between the prices of where properties are listed in Southern Oregon and where they're actually selling.

So we're asking the question, why such a big disconnect with the seller's list price? To where they're actually selling and I want to start by showing all 3 counties, but I wanted to start with Klamath County 1st and Klamath County has some very interesting dynamics. They're growing really fast. It's they're actually having a population increase.

And but I want to show you this is year to date on the left side of this chart. We've got July last year and on the right, we've got June of 2023. And you can see the blue line across the top is where the sellers are listing their properties. Those are the average prices. And there's a, there's kind [00:01:00] of a disconnect here.

In June of 2023 between where they have it listed where they're selling the brown line is showing below 375. The blue line is probably 450. So that's kind of a big difference. If people are wondering why they're not getting offers, it could be that their price too high. And after we talk about all three counties, we're going to talk about some things you can do as a seller, some things you can do as a buyer.

But I just want people to see that the red line is the pending. Now the pending prices are not the actual closed prices. They're not allowed to say what the actual agreed upon negotiated prices until closing, but it's following way more closely with the sold line than it is the listing line. So that's Klamath County. They're a good $75, 000 difference on average between where things are listed and where [00:02:00] things are selling.

Let's do Josephine County next. Josephine County trend line, again, you can see from last summer to this summer, and the disconnect here for 2023 in June, the average properties are selling a little above $400, 000 in Josephine County. But look where they're listed, the blue line is up at six. So, that is almost $200, 000. That's That's a big, big jump. Now you look at the pendings. The pendings are a little more but again, like we just said, when we're talking about Klamath County, the pending line is just where the offer was accepted. We don't know what the finished agreed upon negotiated price is until closing, but that's, that's a really big break between what I call reality and wishful thinking. So no offense to anybody, but Josephine County sellers [00:03:00] take a heads up because if you're not getting offers, there's a, there's one reason why.

Now let's look at Jackson County, Jackson County sellers on average are listing close to $800,000. And that's up from mid sixes, this time last year. So that is one noteworthy thing is that the, the listing prices have increased quite a bit just in one year, but what really matters is where people are buying, like, what did they sell for?

And you can see again, the brown line for June 2023 is below 600, with the listing price line, almost eight. So another really big disconnect between what the sellers are asking for and where people are really buying. Now, one of the reasons why, people have such a discrepancy when we look at charts like this right now, the interest rate increases happened [00:04:00] so fast and so hard.

The buyers have to keep getting reapproved and they're, they're getting approved for less. So it could very well be that this time last year, someone could have afforded a 775, 000 house, but now they're under 600. That is possible. Also when you're dealing with these high interest rates, we're over 7% right now. You really want a bigger down payment and you want more cash to close so that you can try to buy down that rate.

But at the end of the day, it's just shocking to see that we're not any closer with the sellers listing prices to where they're actually getting scooped up. The other thing that happens is all sellers are overly optimistic, usually, and there's nothing wrong with that.

I'm not being critical. I'm just being matter of fact that sellers are sometimes overly optimistic about what they're going to get for their house. And sometimes they ignore what their agent is saying because [00:05:00] their house has A, B and B and the neighbor's house didn't. But This is why I just wanted to show you these these trend lines for prices here.

We are in the middle of the summer. If you're on the market and you've been on for more than 30 days and you're not getting offers or worse, you're not getting showings. This is one of the reasons why you need to sit down and figure out where the buyers are actually writing their offers because they might not be able to afford your house anymore.

So you got to make a decision. So sellers listen up. You either make some corrections to the marketing. That's usually no cost. You might have to make some changes to the property to make it more desirable. There's usually some expense involved in that, but the easiest thing to do outside of changing marketing is to change your price.

And even if you don't lower your price down to where all of the offers are closing, at least get closer so that those little alerts go out on all the apps to the buyers. So at [00:06:00] least people will come back and look at your place again. Okay. If you're buying and you're wondering what the heck are people thinking?

Well, now, you know, they're just a little overly optimistic. There's also a lot of sellers that are just, they're following the price, the price decrease, they're following the market down and they're following late. So it causes more of a schism between where people are actually buying and where the sellers are, are listing.

So one of the things you can do is you can write an offer based on what the appraiser is likely to give it. And that might not have a very close relationship to the price the seller is asking. The risk in that is sometimes sellers get emotional and they get upset. But at the end of the day, at least as a buyer on the buyer side, we are the market speaking. And if they don't have any other people [00:07:00] circling, then as buyers, I would encourage you to write an offer that's realistic compared to what the appraiser and what the market conditions would give it not so much what the seller wishes they could get.

Okay. But you do need some grace and finesse if you're a buyer and you're going to be presenting offers like that. But especially this time of year, where we're at the end of July, going into August, the summer here is almost over. We're a very seasonal market, at least under normal circumstances we're seasonal.

So sometimes. Sellers will accept a lower offer just because they want to be done with it and they don't want to go through another winter. We've seen people take offers as low as $80,000 under. That hardly ever happens. So don't get like too bold if you're on the buyer's side, but do think about writing offers that are more conducive to what the appraiser is going to give the property anyway.

Okay. So that's our podcast for the week. We'd love to hear [00:08:00] from you to talk about what you want to do with your real estate. I want to be your agent. I'm a great listing agent, great buyer's agent. Do a lot with real property, waterfront, first time home buyers investors, elder people, downsizing, whatever you need I'm here.

My numbers 541-301-7980. And if you have any questions about any of these graphs that we put up every week, just give me a holler, be happy to talk to you more about it. Okay. Have a great week. We'll see you next time now.