Sometimes you will see a property that has been on the market 200 days, 300 days, 400 days or even more. Based o the days on market (DOM) you might assume that either there must be something wrong with the property or that the seller must be willing to take anything at this point.
Most often, it's none of the above. The clue as to what is really happening can be in the property's price history. For example, suppose we looked at the history of a property and saw the following dates and asking prices:
10/2/2009 $325,000
1/15/2010 $290,000
4/21/2010 $250,000
7/11/2010 $200,000
8/15/2010 $195,000
9/20/2010 $185,000
If today were 10/2/2010, then the property has been on the market for approximately one year. Without the property history you might assume that the property sat on the market for the entire year at $185,000. However, with the property history you can see that the property probably sat on the market because the seller committed the same mistake many sellers make: setting the listing price too high.
The property history is not always easy to read and without some guidance, you might look at the above history and conclude, "Wow, this must be a good buy! The property is now priced at almost half what it started at." However, even through the price has been drastically reduced it could still be over priced. I use recent comparable sales to determine the market value of the property; not the time or market or total decrease.
You can sometimes infer other interesting information from the property history information. Look at the three sets of history data below. They all start and stop at the same price, each has been on the market for the same length of time but each tells a completely different story.
| Case 1 | Case 2 | Case 3 |
|---|---|---|
10/2/2007 $325,000 |
10/2/2007 $325,000 |
10/2/2007 $325,000 |
Do you see the different story each case tells?
Is every prediction based on the property history correct? No. Sometimes there is not enough information or the data does not reflect the seller's motivation. But it is correct more often than not if you use the property history data in conjunction with other data.
Contact me if you are considering buying or selling Las Vegas real estate. You will be glad you did.
...Eric
Eric Fernwood
RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
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