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7 Essential Credentials to Verify When Selecting Your First Realtor A Data-Driven Approach
7 Essential Credentials to Verify When Selecting Your First Realtor A Data-Driven Approach - Proven 98% List to Sale Price Ratio Based on MLS Data from 2024
When examining a real estate agent's performance, the sale-to-list price ratio serves as a critical metric. As of December 8, 2024, this ratio stands at an average of 98%, a dip from the 100.1% observed a year earlier and the lowest since March 2020. This means that, on average, homes are selling for slightly less than their asking price. It's a noteworthy shift, and certainly below the often-touted 96-98% range. In early 2024, roughly 38% of homes on the market experienced price drops, a figure that, while lower than previous months, remains significant. However, It is worth noting that this ratio can be misleading. It can exceed 100% if a home sells above its list price, which might not always reflect positively on an agent's pricing strategy. Moreover, the metric is susceptible to various factors beyond an agent's control, such as market fluctuations. Key variables such as the accuracy of the initial asking price against market estimates and even the quality of listing presentation play substantial roles. While a 98% ratio might seem impressive on the surface, it's crucial to consider the context and the broader market conditions affecting these figures.
Let's dig into this "List to Sale Price Ratio" thing, particularly that 98% figure being thrown around, supposedly based on 2024 MLS data. The sale-to-list price ratio is simply a way to express how much a house actually sold for versus what it was listed for, as a percentage. So if a place was listed at a million bucks and ended up selling for $900,000, that's a 90% ratio – it sold for less than asking. Early 2024 numbers apparently showed an average ratio of 98%, which is lower than the previous year's 100.1% and the lowest since March 2020. Supposedly, about 38% of homes saw price drops in early 2024, much less than the 57% the month before, but it makes one wonder about market stability.
Now, if a house sells for *more* than its list price – which does happen – the ratio goes above 100%. CoreLogic, a major data provider, is forecasting a tiny 0.1% dip in home prices from September to October 2024, but they also predict a 2.3% increase year-over-year, from September 2024 to September 2025. They release a monthly Home Price Index which should give us an early read on market trends, though it's worth keeping a critical eye on any single data source. It also would be a mistake to make a purchase decision based solely on that, since CoreLogic's predictions are not exactly guaranteed and should be analyzed in conjunction with other data.
Several sources mention things like days on market, sales per square foot, and even how many photos are in a listing as factors to consider. Some platforms are pushing "data-driven approaches," which, in theory, should help agents advise clients, but again, the quality of these approaches can vary wildly. One claim I've seen in multiple places is that the average ratio in various markets usually falls between 96% and 98%. But without access to the raw data and specific methodologies used in those calculations, it's tough to just take that at face value. Also there is that Zestimate that we could use as a benchmark, although Zillow does not enjoy the best reputation and I would not base my decsisions on this alone. Overall, the whole 98% ratio is interesting, but it needs more context. How does it vary across different neighborhoods? What about different price ranges? Are there any outliers skewing the average? These are the types of questions that should be explored when using this data to inform the selection of a realtor.
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