Some may argue that’s a bold statement, but there are some readily available stats from the Minneapolis Area Association of Realtors to back that claim up.
Based upon sales this year through July, the average home received 95.5% of its original sales price at closing. On a June 2007 median priced home of $232,500 that ends up being $10,462. That’s quite a bit of difference!
If you take the Twin Cities’ Average Sales Price of $276,313 instead of the Median Sales Price, you end up with the average home being overpriced by $12,434!
Now I can give you many examples of homes that are priced right that sell for at or near original list price, so I’d be disappointed if any of you went with this straight to a seller and said: “see, you’re $10,000 overpriced!” Use this information as a guide though and realize that as a buyer you do have good negotiating position in this market.
Raw Data:
Median Sales Price Year to Date through June 2006: $236,850
Median Sales Price Year to Date through June 2007: $232,500
Change -1.8%
Average Sales Price Year to Date through July 2006: $276,461
Average Sales Price Year to Date through July 2007: $276,313
Change -.1%
Percent of Original List Price Received at Sale Year to Date July 2006: 97.5%
Percent of Original List Price Received at Sale Year to Date July 2007: 95.5%
Change -2%
Superfluous Data:
I took a sampling of homes in several of the Twin Cities metro counties that closed since April 1, 2007 in the $230,000-$235,000 price range (423 results in sample) and found that they averaged a 96.3% Original List Price to Sales Price ratio, which is a 3.7% difference or still an $8600 difference!
More Superfluous Data:
If you take the median (versus average) from those 423 results, you end up with a ratio of 97.9%, a 2.1% difference, or still $4882.
Depending on how you like to look at numbers, that’s at least 4 ways to interpret the same general data… take it how you want!
Data based on information from MAAR and from the Regional Multiple Listing Service of Minnesota (RMLS).
