Tom, Home Buyer in 94040

On a $/SF basis, why do asking prices increase at a time when sold prices are in free fall?

Asked by Tom, 94040 Mon Mar 2, 2009

Is there an explanation that makes sense. Here is the data I am referring to (second chart on the left): http://www.redfin.com/city/15525/CA/Redwood-City

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Steven Ornellas’ answer
Hi Tom, Mark Twain summed it up pretty well if you are looking for an explanation, "There are lies, damn lies - and statistics.’

The chart you are referring to is based on Median pricing data. DO NOT rely on median and average-based statistics, these measures are meaningless for targeted selling/purchasing as they have no regard for any of the specifics you may be searching for and can be skewed by segments of market activity not matching your individual situation. A “median” is described as “the number separating the higher half of a sample from the lower half.”

Whether a buyer or seller, one should look specifically at the targeted segment of properties that match their search criteria for the information to be meaningful. Generalized stats "cloud" the information that you should be looking at to be fully informed. Generalized stats are easier to come by, but that doesn’t mean they should be used to make one of the most important financial decisions of your life.

A Comparative Market Analysis (CMA) that targets exactly what you are seeking in a new home, or matches the home you are selling, gives you THE best representation of market price/activity/trend direction - for the specific property details you search on.

Please let me know if you would like me to generate a custom CMA for you.

Best, Steve
0 votes Thank Flag Link Mon Mar 2, 2009
BEST ANSWER
Hi Tom,
Just a quick thought on your asking price = list price and sold price!

Remember when a Seller puts his or her house on the market, they know that the buyer will not just come in and pay the full price although there have been times when that was the case and even higher than asking price if there were multiple offers. But in today's market the asking price includes several items, the seller knows that eventually he will have to reduce the price, and then after he needs to do that he will also have to negotiate with the potential buyer 5 % 6 % below asking price etc., so this may be the single reason for you seeing that the asking prices are not going on the very same curve as the selling prices. The selling prices are the ones after the initial asking price has been reduced (once or more than once) and after the negotiations with the buyer to come to the agreed upon final sale price....

Hope this helps!
Edith YourRealtor4Life! Working always in the very BEST interest of her clients!
edithsellshomes@gmail.com

If you every come across anyone you know who is moving to Chicago, the larger chicagoland area or anywhere in Northern Illinois would you send them my way? Thanks! I provide great service!
0 votes Thank Flag Link Mon Mar 2, 2009
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