Average Sale to List Price
Why is this important?
The sale to list price is the final sale price (what a buyer pays for the home) divided by the last list price, and is an indicator of the strength of a housing market or where housing supply is low, but demand is high. When it is more than 100%, the final sale price is above the asking price. List prices are influenced by the local inventory and motivation on the part of the seller, and sales prices are determined by the same factors in combination with a buyer’s willingness and ability to pay. In a competitive housing market, buyers often make offers above the asking price.
For a seller, a high sale to list price may indicate that the seller has generated personal wealth through the sale of the home. Since homeownership is the primary source of wealth for most Americans, a high percentage is one indication of a prosperous community; however, a high percentage may also indicate a housing market experiencing increases in price and loss of affordability for existing residents and potential buyers who may be priced out [i].
[i] “Homeownership and Wealth Creation.” Editorial Board. The New York Times. 29 Nov 2014. Print. https://www.nytimes.com/2014/11/30/opinion/sunday/homeownership-and-wealth-creation.html