Treasure Valley Real Estate Analysis

Overall Description of the Target Real Estate Market

Sales by City

Average Days on the Market

Home Prices

Negotiating Prices in the Treasure Valley

Treasure Valley Real Estate Summary

Asking Price vs. Selling Price

The following pages provide a similar, yet slightly different analysis.  The asking price differs from the original price, as demonstrated by the following example.  A seller originally puts a home on the market for $250,000.  After a time, he drops the price to $235,000.  He accepts an offer and sells the home for $225,000.   In this hypothetical example, the relevant prices are as follows:
Original Price:  $250,000 (What the seller originally listed the home for)
Asking Price:      $235,000 (The MLS list price at the time the home sold)
Sales Price:        $225,000 (Actual sales price)

The difference between asking price and sales price is much smaller than the average difference between original price and sales price, ranging from $400 to about $1800 (substantially less than the $5,500 difference between original price and sales price.)

The following table is provided to highlight the range of discounts and demonstrate that discounting has not grown substantially as the year has progressed. 

The Average Discount (difference between asking price and sales price) has increased from about $700 per home in January to about $1800 per home in October.  (Remember that prices have risen substantially during that same period.) 

The Biggest Discount represents the transaction with the single largest discount off asking price.  Even in the best market, sellers discounted homes nearly $20,000 every month. 

The Percentile Analysis (5th, 25th, Median, 75th and 95th) is a measure of spread.  Imagine that there were 100 transactions in a given month and that all were ranked in order of the size of the discount—the transaction with the largest discount at the bottom and the transaction with the largest premium above asking price at the top.  The number at the 5th home on the list (the one at the 5th percentile) represents that transactions discount.   This means that 4% of the discounts are larger than that number and 95% are smaller discounts (or premiums).  The same holds for the 25th, 75th and 95th percentiles.  The median represents the transaction where exactly ½ the discounts are larger and ½ are smaller (or in other words they are premiums). 

The percentile analysis does show that discounting has increased slightly since the spring and summer months.  However, from other analysis, we know that prices have not actually decreased.  We can conclude, therefore, that while these numbers do represent a market that may be trending softer, these differences may simply indicate that sellers are initially being very aggressive with their asking prices, but are willing to sell for more moderate profits.  The actual prices that sellers are receiving for comparable homes are higher in October than they were in January. 

Difference Between Asking Price and Selling Price:  Percentage Analysis

The same discount analysis can be conducted using percentages instead of actual discounts.  This methodology standardizes the results and makes it easier to visualize what is actually happening. 

For Example: 

In this example, a $25,000 discount represents a 13% discount (-13%).  As the table below indicates, the average discount has increased as the year has progressed, but is still less than one percent.  Sellers are still getting close to all they are asking for. 

When analyzed as percentages, the discounts do not seem to be growing very quickly over time.  That is because they really aren’t—as has been demonstrated repeatedly in this report.  The actual discounts are increasing (as documented on the page above) but so are the base prices.  As a percentage of the asking price, discounts are only slightly higher than they were in January. 

Asking Price vs. Selling Price:  New Homes vs. Existing Homes

Percentage Difference Between Asking Price and Sales Price:  New Homes

Percentage Difference Between Asking Price and Sales Price:  Existing Homes