If you were following the comments from my post from yesterday, I said I would follow up with another stab at diving into how the sales prices versus listing price changes over time. Seeing as how it is already getting late (and I’m tired!), I’m going to stop trying to make sense out of the numbers and present what I’ve found so far.
However, before I go any further, I’m going to rant at my fellow real estate agents! For the sake of all of us who actually care about data, please learn to double check your work before submitting listing information to the MLS! I spent more time cleaning up the database due to lazy real estate agents then I did actually creating the charts! Here are some things to look out for (but this list is by no means exhaustive): (1) Spelling: Fremont is spelled with only one “e”, (2) Location: South Lake Union is not a neighborhood located within Ballard and (3)Price: your home that sold for $345,000 probably should not have been listed for $34,500,000.
With that rant out of the way, I thought I would also mention that I’m not the only one surprised by housing numbers today… Hot Property had an article where Amey Stone says reading NAR’s press releases on sales levels “is starting to be a bit of a yawn — sales weren’t quite at record levels, but darn near close to it.” Unless you get tickled by trends and statistics, expect to sleep through the rest of this post…
When I look at the entire Ballard Area as defined by the MLS (this is a huge area that includes places like Greenlake, Blue Ridge, Wallingford, Fremont, Sunset Hill etc). We see the same seasonal trends over the past two years that I identified yesterday. But when we go back another season, the trend becomes much less pronounced.
Here are the things I found most interesting about the chart:
- The seasonal variation is much less pronounced in previous years
- There has been a steady trend up wards where the sale price is greater than the listing price
- In terms of trends, it didn’t really matter whether I used the original list price or the adjusted list price.
- The huge drop in 08/03 is due to some homes in Broadview that were listed way to high!
My speculation is that the patterns identified the above chart have a lot to do with evolving sales tactics by agents. It seems like it has become more and more common for agents to list a home below the value that they think it will sell for… This does two things: (1) It assures a quick sale and therefore a quick commission for the agent. (2) It has the potential to bring in more buyers and thereby raise the final sale price of the home.
When I went to analyze the data at a more local level, things got much messier… Rather than seeing clear seasonal patterns as I did in Loyal Heights, things simply got fuzzy. They got so fuzzy that I’m hesitant to even provide the next chart because it simply looks like an ugly mess…
My goal in creating the chart was to see if the same trend that held up in my analysis yesterday for Loyal Heights, would hold up for other neighborhoods. As the chart above demonstrates, it roughly holds up for all of Ballard, but as the chart below demonstrates, it does not hold up at the neighborhood level. I’ve done enough regression analysis for transportation planning studies to know that a chart like this is going to give meaningless trends.
By the way, if you’re interested in the raw data that I used to create these statistics, just email me, and I can send you the Excel file that has all the wonderful (?) pivot tables and charts I used in creating this post.
Also, please feel free to comment on other ideas you might have for exploring the wealth of information that is locked up behind the MLS database. Anna has the key that opens that door! 🙂