By Quentin Fottrell and AnnaMaria Andriotis
The asking price is the starting point for all home sales, a ballpark figure typically close to what buyers end up paying. But the nation’s real estate market is so out of whack, experts say, that in many cities the gap between the asking and purchase prices has grown enormous. In fact, while home sales are on the decline nationally, list prices keep rising.
Existing single-family home sales fell 2.6% in March from a month earlier to a seasonally adjusted rate of 4.48 million units, according to data released Thursday by the National Association of Realtors. Meanwhile, the median sales price rose to $163,800, up 5% from February and up 2.5% from a year prior. On a national level, the data suggests that individuals who are buying homes are willing to pay more. On a regional level, however, buyers’ offers vary significantly.
In some markets, sellers aren’t getting what they’re asking for or anywhere near it. In the Atlanta metro area, for instance, the median list price was $150,000 in December, according to Realtor.com. But the median sales price was just $90,600 at the end of the year, according to the latest data from the NAR. In Jacksonville, Fla., the median listing price is 34% higher than the median sales price, while in Washington D.C. it’s 13% higher.
It appears these price gaps between asking and actual sales prices continued into March. This week, Realtor.com reported that median list prices rose 5.6% in March from a year prior. Meanwhile, national median sales prices over this period rose just 2.5%, according to the NAR. March marks the beginning of the peak home buying season that stretches through the summer. List prices tend to rise with the temperature, says Julie Reynolds, a spokeswoman for Realtor.com.
Still, experts say asking prices in some cities appear to be way off. When there’s a $50,000 or more difference between the asking and selling price, that’s a sign that the house is likely overpriced, says Mark Goldman, real estate lecturer at San Diego State University’s Corky McMillin Real Estate Center. “Sellers and their agents are more optimistic than the buyers closing on deals,” he says.
For their part, realtors in Atlanta and Washington, D.C., say that the difference is largely due to lagging buyer demand for homes in the suburbs that’s led to homes selling at discounted prices. They say real estate in the city is in high demand and selling near asking prices. In some areas, foreclosure sales, which typically sell at a discount, are pulling selling prices of non-distressed homes down.
SmartMoney crunched the numbers to find the metro areas where the gap between listing prices and the actual purchase prices are the largest and the areas where they’re the smallest: