Saturday Salt Lake Real Estate Statistics
Last Saturday I wrote about absorption rate. As market statistics are most relevant when looking at market segments I picked studying condominiums in four downtown Salt Lake City zip codes: 84101, 84102, 84103, and 84111 with prices between $200,000 and $250,000. Click Here for that article.
Last month the average Salt Lake City real estate sales price on closed homes, condominiums and houses was $254,000.00 This is where the bulk of the activity is. In those same four zip codes condos from $500,000 to $700,000 had no homes that went under contract.
There are a lot of headlines offering statistical facts but there are usually covering a broad, even national real estate statistic. They are not local and local is what is relevant to your buying or selling real estate decision. All real estate is local. What is happening in one market, even one segment of a market will often counter a national trend. You can glean a lot of information from local blog articles like this one which is why during this period of posting for MediaOne Real Estate I am devoting Saturday to this topic. However, this is a service your local MediaOne agent is able to provide in a specific local segment of the Salt Lake City or Utah market you are focused on.
From my article last week I stated that it is important when buying or selling a home to be aware of the absorption rate that relates to your purchase or sale. This is one important statistic that can be narrowed down to your situation.
The second statistic to know is the Average Markdown (List-to-Sale-Ratio). What did the price of the home start at versus what was the final selling price? Like all statistics this is more significant when the numbers calculated include a large sample. I noted that one American Towers unit went on the market at $550,000 and sold for $450,000. This is just over an 18% discount. Using one sale you cannot conclude sellers are expecting to reduce their home price by 18%. The larger number in the calculation the better conclusions one can make. In fact this is a very unusual markdown in American Towers which makes me wonder what was this all about?
Also, looking at more than one form of statistic helps you make better conclusions. Adding absorption rate to the Average Markdown are two that illustrate my point.
Many of the examples and topics I have used in writing this blog for MediaOne are about downtown Salt Lake City, a lot of it about condominiums. So in illustrating Average Markdown I will go South and West a bit to a very popular area in our MLS. In our MLS,the market is broken down into areas. One area covers West Jordan, South Jordan, Riverton, Harriman, and Bingham. There is a lot of activity in this area: 110 homes priced between $200,000 and $300,000 sold in this area during the last 30 days. I know most people have a range they are searching in and that range is often more compact than $100,000 in this $200,000 to $300,000 span. As I have a lot of home sales to work with I will use $225,000 to $250,000 in my calculations of this Saturday example. This leaves us 61 sales, a good number, for our calculation.
The calculations in this market are interesting in a couple of ways. First there is about a 3% Average Markdown. Taking a closer look at the specific sales shows that over 50% of the homes closed without any markdown. I consider markdowns to include sellers contributions as part of the end price. Sellers contributions is an article to itself. Almost every home that took a markdown took it as a contribution to the buyers closing costs.
I point out here that if you are looking in a large development such as Daybreak you could probably narrow the study down to only homes in Daybreak, especially if there were a large number of sales.
Looking at the Average Markdown gives both buyers and sellers the opportunity to be realistic in their expectations. In this MLS area, with a home in comparable condition, listed by a knowledgeable REALTOR®, it is a waste of time to either expect a huge discount and in this case, if you are a seller, it is to be expected to be asked to come down a little bit by paying some of the buyers closing costs.
Blog Archive2014-12-31 05:46:07
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