Terms like “Sale Price” come with an average discount of just under $38,000 Nationally
SANTA CLARA, California., September 25, 2024 /PRNewswire/ — Homebuyers looking for a way to save money while searching for a home may want to pay attention to key phrases used in listings. to new Realtor.com Report® Released today, nationwide, listings with the phrase “Sale Price” or similar in the listing description come with an average discount of just under $38,000 outside the average housing price.
“We've all seen listings with terms like underpriced, sale price and bargain, and we wanted to find out if those terms actually came with a price reduction,” she said. Ralph McLaughlinsenior economist, Realtor.com®“We found that there is a relationship between value keywords and sales prices. For a thoughtful shopper willing to spend a little time looking at deals, focusing on these keywords can be a good place to start.”
Certain “value”-based words used in property descriptions correlate with lower sales prices and can be used to help homebuyers find truly affordable properties during their online home search. Nationwide, phrases like “priced to sell,” “under-appraised,” “underpriced,” and “bargain” are associated with sales prices that are 8.5% lower on average than similar homes with similar configurations in similar neighborhoods.
However, this varies substantially across metropolitan areas, both in the discount associated with such phrases and in the density of ads that include them. The average discount ranges from 23.1% in Little Rock, Arkansas.to only 3.2% in Orlando, Florida.in the 38 markets where there is a statistically significant discount. The share of properties for sale with “price to sell” in the description ranges from just 1.9% in Long Island, NY, to 6.7% in Sarasota, Florida.
“Much of this variation can be explained by the proportion of listings with such listing terms, suggesting that buyers in markets with few 'priced to sell' listings may be more sensitive to characteristics that are associated with a lower-than-typical listing price (such as the condition of the home) than buyers in markets where such listings are more common,” McLaughlin said.
The biggest discounts are in the South and Midwest
Homebuyers in Southern and Midwestern markets can expect the biggest discounts on properties that have “priced to sell” in their listing description. Little Rock, Arkansas.; St. Louis, Mo.; and Charleston, South Carolinalead the pack, where, on average, properties on offer come with a discount of 23.0%, 18.7% and 15.9%, respectively.
10 Meters with the Highest Discount on Houses at Sale Price
|
Market |
Average |
Medium Listing |
Discount on |
% of listings |
|
Little Rock-North Little Rock-Conway, Arkansas |
-23.0 % |
$249,900 |
$57,494.00 |
2.6 % |
|
St. Louis, MO-IL |
-18.7 % |
$264,900 |
$49,476.00 |
2.7 % |
|
Charleston-North Charleston, South Carolina |
-15.9 % |
$499,999 |
$79,558.00 |
3.9 % |
|
Memphis, Tennessee, Mississippi and Arkansas |
-14.5 % |
$299,000 |
$43,262.00 |
3.0 % |
|
Lake County-Kenosha County, IL-WI |
-12.6 % |
$399,900 |
$50,464.00 |
2.8 % |
|
Nassau County-Suffolk County, New York |
-12.5 % |
$759,000 |
$94,662.00 |
1.9 % |
|
Cambridge-Newton-Framingham, Massachusetts |
-11.5 % |
$779,000 |
$89,851.00 |
2.1 % |
|
Tulsa, Oklahoma |
-11.4 % |
$287,500 |
$32,801.00 |
3.0 % |
|
El Paso, TX |
-11.2 % |
$279,000 |
$31,295.00 |
2.8 % |
|
Wichita, Kansas |
-10.9 % |
$262,000 |
$28,655.00 |
3.0 % |
On the other hand, the markets with the smallest discounts are found almost exclusively in Florida and Western markets. Orlando, Florida.; Seattle; and Salt Lake City fall to the bottom of the list, where properties on sale will net you only an average discount of 3.2%, 3.7% and 3.8%, respectively.
10 Meters with the Smallest Discount on “Retail Priced” Homes
|
Market |
Average discount |
Average listing price |
Discount on the average price of the advertisement |
% of properties for sale with “sale price” |
|
Orlando-Kissimmee-Sanford, Florida |
-3.2 % |
$424,900 |
$13,497.00 |
4.8 % |
|
Seattle-Bellevue-Everett, Washington |
-3.7 % |
$800,000 |
$29,804.00 |
2.8 % |
|
Salt Lake City, Utah |
-3.8 % |
$565,000 |
$21,458.00 |
3.7 % |
|
Austin-Round Rock, Texas |
-4.0 % |
$499,000 |
$20,200.00 |
4.6 % |
|
Denver-Aurora-Lakewood, Colorado |
-4.3 % |
$609,800 |
$26,125.00 |
4.6 % |
|
Los Angeles-Long Beach-Glendale, CA |
-4.4 % |
$955,000 |
$42,375.00 |
4.1 % |
|
North Port-Sarasota-Bradenton, Florida |
-4.4 % |
$489,000 |
$21,750.00 |
6.7 % |
|
Washington-Arlington-Alexandria, DC-VA-MD-WV |
-5.2 % |
$555,000 |
$28,645.00 |
4.8 % |
|
Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin |
-5.5 % |
$394,900 |
$21,856.00 |
2.4 % |
|
San Diego – Carlsbad, CA |
-5.8 % |
$949,995 |
$54,969.00 |
3.6 % |
Methodology
To determine whether property listings for sale that are described as “priced to sell” are actually discounted, we test whether there is an effect on property prices with this and similar phrases using a hedonic pricing model. First, we look at all single-family homes listed for sale in Real estate agent.com in it US. in August 10, 2024 and identified which ones were described with the words “sale price,” “bargain,” “underpriced,” “fixer-upper,” “contractor special,” “handyman special,” and “underpriced.”
We then calculated a hedonic model to determine the effect of the offer clause on home sales price, taking into account the number of bedrooms, number of bathrooms, square footage, lot size, age, and ZIP code of each property. This allowed us to estimate the average sales price of properties with such clauses compared to similar properties within the same metropolitan area without offer clauses. We used a 5% level of statistical significance to interpret the coefficient on the offer clause.
Only metro areas where the coefficient on the listing term was significant were considered true “sell-priced” markets. Among the 100 largest U.S. metro areas we examined, only 38 made the cut. We then calculated the average listing price discount for each of these 38 metro areas. For demonstration purposes, we used the median listing price of August 10, 2024 to show, on average, the dollar discount on the median-priced home.
About Realtor.com®
Real estate agent.com® is an open real estate market created for everyone. Realtor.com® It pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers that empowers more people to find their way home by breaking down barriers, helping them make the right connections, and building trust through expert information and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and brand solutions that help them succeed in today's on-demand world. Realtor.com® It is operated by News Corp. National Weather Service NWSA])) [ASX: NWS, NWSLV] subsidiary of Move, Inc. For more information, visit Realtor.com®.
Press contact: Mallory Micetichpress@realtor.com
SOURCE Realtor.com
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