sMith Busters: Agents ask higher prices in season

Real Estate

sMith Busters: Written By Steve Martin Smith

This week on sMith Busters we will learn whether or not Realtors in Sarasota County list homes for sale at a higher price than they would at other times of the year.

It is a widely accepted thought that our gulf coast season begins as soon as October and ends in April/May; with the largest number of visitors and snowbirds staying here in January through March. Although I’ve heard the subject of this sMith Busters blog many times, it came up again at an open house this weekend. To quote our visitor, “I watch the market closely and I’ve noticed that REALTORS ask higher prices for homes during season”. 

For starters, the average list price in Sarasota County for July of 2019 was $439,000. The average for March was $421,000. July 2018 was $444,000 with March of that year at $418,000.  That alone shows that prices are not necessarily higher in season. Although the chart I just linked you to also supports the idea that prices can be higher in season.

What is important to understand is that sellers often think that their property is worth more than it is. That causes them to list higher than they should all year long. That is one of the reasons why 367 listings each month are either cancelled or expire and the average days on the market is in the 80’s.

It also explains the 1,200 price decreases each month.

Now even though over pricing your home is one of the great errors a seller can make, there is another less talked about mistake that is also noteworthy. Unfortunately, most REALTORS are likely to be unaware of this fact so it may be up to you to educate your REALTOR. The report that I’m linking you to is not one that I’ve ever seen or heard of before. No one in real estate seems to talk about this but me. It shows the active listings per month alongside the quantity of accepted offers on those listings.

In February of this year there were 5,896 active listings in Sarasota County. Only 1,187 received an offer that the sellers accepted. That means that 80% of the active listings in February did NOT receive an accepted offer. However, in August, only 72% of all active listings did not receive an accepted offer. The average sales price was only $5,000.00 difference between those two months.

Let that sink in for a moment. A higher percentage of sales in August than in February with a minimal price difference. 

So, is the sMith myth busted?

Absolutely! Sellers and Realtors do not wait for season to over price properties. 20% to 25% of active listings implement a price reduction all year long. If there are more in season, it’s simply because there are more overall listings in those months.

Here's a 60 second video I did on this topic in 2018.