We are now about one year into the tangible shift in the “balance of power” between buyers and sellers in the local Bend market, and data is starting to show how this shift translates across pertinent metrics for sellers. Especially among them are the main metrics of “time” and “money,” which can be represented by “days on market,” and the “sale-to-list price” ratio. Here, we share a little more about what these metrics are indicating, as well as what this means for our sellers in the coming months.
As we mentioned above, average sale price can be misleading as forces such as stock market and interest rates are driving more sales in the luxury sector. This, coupled with fewer sales overall, can appear to indicate an increase in the overall market, which begets confusing headlines. From a seller’s perspective, a more illuminating metric can be how the final sale price compares to the original list price for a given home. From this, we can get a feel for both the price drops that are conducted prior to an offer, and also just how much the price is negotiated with the offer that does finally lead to the closing of the home.
As shown in Chart B below, we can see this “sale-to-list price” ratio as an average for the past 10 years, beginning at roughly 94% in 2013, increasing to over 100% of the asking price during the pandemic when multiple offers were prevalent, and coming back around to roughly 95% today. This means that during the time between its first day on market to its final closing date, the average difference is roughly 5% less than the seller’s original asking price. It is useful to see here that even the fairly healthy market from 2014 to 2019 maintained a “closing price to original
price” ratio of 96%-98%, while homes continued to steadily appreciate during that time. In short, sellers should plan for some negotiation in any market but should expect greater negotiation today than in recent years.
Another important factor in selling a home is to consider how long it will take, both to allow for future planning and next steps. In the main article we touched briefly on the current median days on market, but here, we think it is valuable to provide some perspective. Looking back a decade, we see an average of 90+ days on market for Bend homes in 2013, before decreasing to roughly 70 where it remained during the healthy and steadily appreciating market – until the pandemic, where we see a drastic dip to just 27 days! Today, the average home takes 44 days. Keep in mind that those are the homes that actually sell. This number could easily rise overall if some of the active, languishing listings sell and get factored into this data point.
Yes, it is true that for a seller to achieve a quick and efficient sale today, the home must stand out. This means it must be well-priced, beautifully presented, expertly marketed, and dynamically represented. It must compel engagement digitally, and deliver on that promise once buyers are on-site.
For some of our clients, this means that our team may counsel them to reconsider selling for now. But the good news remains that even with a decrease in demand, greater negotiation, and a growing number of days on market, homes in Bend have still appreciated 20%-40% in recent years, which is well above pre-pandemic trajectories. For many of our clients, this means an exceptional return on investment above all.