09/08/2020
Paradise Valley Agents Over-Price Homes a Whopping 83% of the Time
Not only have PV seller’s been overpricing their homes the vast majority of the time, 50% of the Paradise Valley listings have used a realtor who has sold less than 2 homes in the area over the last 5 years. It’s clear that Paradise Valley home buyers prefer to over-price and wait, even though 50% of the agents being hired for listings don’t have much or any experience in the area. Incredibly that number in Scottsdale rises to 64%, and in Avondale and it’s a lofty 84%. It’s interesting to note though, even with all that lack of experience, Avondale listings that were sold at or above the listing price, sold in a very quick 25 days.
Warning, this article is for those sellers who like to geek out on the numbers in an effort to collaborate better with their realtors. Getting back to pricing, when looking at the data I like to group home sales into one of two categories. First, there are overpriced homes. These are homes that sell below their listing price. Second, are homes that sell at or above their listing price. Paradise Valley is a small market and a bit unusual, but it can also exaggerate some pricing tendencies that would otherwise be invisible or less obvious. In sales where the property was over-priced, the home sat for an average of 135 days in PV, and was ultimately reduced by an average of 265k. Since 2019, in Scottsdale an adjacent market, Since 2019 overpriced homes sat an average of 92 days . This one surprised my quite a bit, I would have thought that number would be quite a bit lower.
It occurred to me that an agent by agent break down might point to some of the strategies PV agents may be using. If you look at the top 5 sellers in Paradise Valley, you find a very strong bias towards overpricing the homes. It is so much so, that the top 5 agents have only managed to sell above the original listing price 8.5% of the time. That percentage becomes even more interesting when you look at Paradise Valley as whole. Only a little more than 17% of homes sold at or above the listing price since the beginning of 2019. Interestingly enough, Scottsdale has suffered the same fate as Paradise Valley, with homes being sold at or above the listing price a mere 21% of the time. During that same time, agents from Gilbert were able to sell at or above listing price approximately 44% of the time, Mesa also around 44%, and Glendale at 42%. Are things that much easier in those areas?
Do the agents have pricing strategy right in Paradise Valley, or are we looking at this through too narrow a lens? Let’s look at some comparable trends in other areas of the valley. From the beginning of 2019 Gilbert homes that sold above their listing price sold on average in 23 days, in Mesa an average of 28 days, in Phoenix 30 days, and in Avondale 25 days. In other words the valley as a whole is increasingly selling homes fast and above the listing price, this is not consistent with the PV data at all, in fact it’s just the opposite.. My next article will piggy back off of this one. I will find pockets of the valley that closely resemble Paradise Valley, and compare pricing strategy in these areas, agents tenure, same as we did here. Will we find overpricing is the best strategy in these niche areas, will we find a large number of agents with little experience handling the lions share of the listings, or will we find something altogether different?
