What is this? It is called a sale-to-list price ratio and it is a percentage of the price a given property sold for compared to what it was listed for. I’ll give you an example; let’s say a house was listed for $200,000 and then sold for $195,000. The sale-to-list price ratio would be 97.5%. Pat yourself on the back because that is a good ratio. Anything around or over 100% is a good day.
So why do we track this ratio? Well, it is an indicator of how much people are getting out of their property listing and how the real estate market is performing in general. When we look at this ratio over time, we can begin to see trends in the marketplace. If the ratio is trending upward, it shows that people are getting more bang for their buck, which is more prevalent in a seller’s market. As this ratio trends downward, it means people are pulling less money out of their listings, which is more prevalent in a buyer’s market.
OK, so what is happening now? I pulled the statistics for Columbia and Suwannee Counties in Florida for the past ten years and then the last three years by quarters. It’s no surprise that the ratio has been going up for the past several years. We have been in an extremely growing and robust market. But it looks like the peak was in the second quarter of 2022 and the trend is downward now. However, this is not doom and gloom. We are still seeing ratios of over 90% which is still very good. Other areas of the country have fallen off much faster.
It is also important to realize that this sale-to-list price ratio is not across all segments of the marketplace. I often look at stats in comparison to their sale price or house size to see what is happening. Right now, the sweet spot is around $325,000; as sales prices go up from there the ratio goes down; as the sale price goes down from there so does the ratio. It is probably easier to look at the chart below to see what I’m talking about.
BOTTOM LINE: The area is still doing really well with this sales ratio. It is also a good indicator that our local real estate professionals are doing a great job in listing properties for what they are really worth. When there are lots of listings on the market that are listed for way over what they will sell for, it brings this number way down. If you are an agent or homeowner and want to list your property at the right price, reach out to me and I might be able to help. Thanks for reading my blog.
NOTE: the statistics noted here are from the North Florida Realtors MLS system for Columbia and Suwannee counties. The ratios are based on the starting list price and not the list price at the time of its sale. The dates are as of the date of sale.