People have been selling their homes for less than they are worth. Wait, really?


People have been selling their homes for less than they are worth. Wait, really?
By Scott Rogers • November 11, 2010
I heard someone make the comment below yesterday....and it struck me that it might be a bit of a contradiction.... "Appraisals are difficult these days because people have been selling their homes for less than they are worth." Forget the appraisal aspect for a minute --- let's focus on whether it is possible for people to sell their homes for less than they are worth. $400k perceived value vs. $365k sales price Let's suppose a house is on the market for $450k for 90 days, and then $425k for 90 days, and then $400k for 90 day, and then $375k for 30 days before finally selling for $365k. If we really, really think it was a $400k house, does it mean that the $365k sales price indicates that it sold for less than it is worth? Is it not possible that because it sold for $365k, that it was worth $365k? $250k perceived value vs. $200k instant sale Now let's suppose that we judge a house's value to be $250k in the present market. If the house is listed for $200k, and sells in 24 hours, is the value really $200k? Perhaps it is higher? Perhaps in this case it sold for less than it was worth? I would argue that if a house is marketed effectively, and that it is not an instantaneous sale, that the house sold for what it was worth. In the first example above ($400k perceived value) it's very difficult to argue that the house was really worth more than $365k. Nobody stepped up to the plate to buy other than the $365k buyer. I suppose the counterpoint here is that perhaps if the house had been marketed for two years at $425k, someone might have eventually come along to pay $400k. Seems doubtful to me, but everyone is allowed to speculate. Of note, I'm not trying to poke fun at anyone who might think homes are selling for less than they are worth these days. I actually have a much more convoluted way of saying rather similar.... "Many of the houses that have actually been selling recently have been at prices that are lower than we might otherwise expect." Perhaps now more than ever it is important to remember (I'm stealing this from you, Andy)....nothing is worth something unless someone wants to pay. Receive Updates by Email Recent Articles: There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase Home Sales By Price Range In The City Of Harrisonburg Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? How Much Slower Are The Winter Months In Our Local Housing Market? Rockingham County and New Home Sales Drive Surge in Area Housing Market Find The Balance Between Optimistic And Realistic Home Pricing Room Size Is Difficult To Understand Solely From Real Estate Photos How Much Would You Value Not Having To Prepare Your Home For Showings? One Out Of Four Homes Is Taking Longer Than A Month To Sell Consider The Cost Of Your Planned Renovations When Planning Your Offer
Have any questions? Contact Scott Rogers at 540-578-0102 or scott@funkhousergroup.com
Based on information from the Harrisonburg-Rockingham Association of REALTORS® or its MLS, for the period Jan 1, 2000 through Nov 22, 2024 (unless otherwise noted).
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