When selling your home, looking at recent data will help you understand the supply and demand for homes in your price range in your area.
What’s the Percentage of Successfully Sold Listings in Your Area?
An important statistic to understand is the percentage of successfully sold listings in your marketplace. Know the number of active, pending, sold, withdrawn, expired and re-listed listings in your home’s price range for the last month, 3 months, 6 months and year. As experts in expired listings, we have found that most sellers cannot answer the simple question of “How many homes are actually selling in your area?” Phrased differently, “What percentage of homes are failing to sell in your market?” Simply put, you are not alone and understanding the home selling success rate gives you the understanding of why your home did not sell, and more importantly, what you can do about it.
Let’s start by adding up the totals for all homes that attempted to sell:
Active + Pending + Sold + Withdrawn + Expired
= Total Listing Attempts
To determine the rate of success in your market segment, divide total number of sold for each time frame (1, 3, 6 and 12 months) by the total number of listing attempts: Total Number of Sold / Total Listing Attempts x 100% = Home Selling Success Rate
Here’s an example. Let’s say you own a single family home that was recently FHA appraised at $400,000 in Lower Merion Township, Montgomery County. For the period of 12/21/2011 to 12/20/2012, the total number of listing attempts for single family homes in Lower Merion priced between $350-450,000 was 131. The number of homes that were successfully sold in that same time period in Lower Merion was 77.
77 / 131 = 58.8%
Given that in the past year, 131 houses were listed for sale in the MLS and only 77 sold, the rate of home selling success for that area is about 59%. This means that 41% of homes failed to sell! So if only 59% of the inventory is selling, you want to be priced within the most competitively priced 59% of listings comparable to your home.
In the same area for the same time period, homes in the $850,000-950,000 range experienced only a 48% sold rate. So for Lower Merion single family homes, the higher the price range, the lower the success rate.
Every market segment is different so understanding the sold rate in your area is the most important step to determining a price that will work for you. By now you may understand that it’s extremely important to do this research for your home.