The Never Ending War Between List Price and Sales Price and the Cooling Condo Market
I am going to be very specific, I am talking about San Francisco Real Estate.
There is a typical cycle of list price vs sales price we have seen here in San Francisco.
First let me define both.
List price is what the house is marketed for. The list price of a house has been determined by the owner and their real estate agent. This number is not usually where they want the house to sell for, this number is
To get people in the door
To get lots of people to write offers so you create competition
So it looks very attractive
The list price is strategy.
Sales price is what the home sells for, what the home is worth, what the highest bidder is ready and willing to pay for the house. This price is the real price and it is determined by the buyer and their realtor using a number of factors such as
-comparable sales in the last 6 months
-Disclosed information
-Competition
And one other factor you cant put a price on, gut feeling of your realtor not the buyer.
Typically in San Francisco the listing agents have priced things about 20% before where they sell. This is known and all my buyers know this. There are a few times though where it might change.
I recently had a discussion with another agent about her pricing tactics for a high end condo coming on the market this week.
First let me preface this by saying the market is shifting, it is June 2022. The condo market is slowing down, the interest rates are slowly rising so buying power is lowering. Fewer people are qualifying for the amounts they used to and fewer people are out buying condos in general right now. So what does that mean for pricing?
Well it means that you might get a condo at a slightly lower price than a few months ago, and if you buy now and hold it you probably will be in a great position in a year or two.
We have seen it time and time again, when the market slightly goes down people stop buying condos, then the prices go right back up and so does competition.
And yet I still get “I am waiting for the market to cool down” comment all the time.
Well here it is, its cooled down. Are you ready to buy?