Real Estate Price Definitions
By definition, buyers and sellers establish the actual “market price” of any property when they complete a transaction. This is also known as the selling price. The seller and seller’s real estate agent determine the original listing price before the home goes on the market. That process typically includes a competitive market analysis to review recent sales of comparable property. Sellers often have a price goal in mind that can influence price setting. A third factor is an agent’s willingness to tell sellers what they want to hear about value in order to secure a listing. That practice is known in the industry as buying a listing.
Real Estate Changes from Original Listing Price
The chart tracks the accuracy of that price setting process. Any points below the zero horizontal axis means the property sold for less than the original listing price. Positions above the line indicate a hot market where buyers are bidding more than the original listing price.
Anybody who has been home shopping recently has felt the impact. 2021 and 2022 were the first years since 2013 that prices were rising so quickly that eager sellers were still underestimating demand and pricing their homes below market levels. Some Sonoma County cities including Petaluma and Windsor maintained strong enough demand to feature homes selling very close to the original listing price. Other cities like Healdsburg and Sonoma grew their averages and prices so quickly in 2021 that sellers and agents got accustomed to ambitiously pricing homes higher than the market.
Average Sonoma County SFR Selling Price
Healdsburg and Sonoma are relatively small towns with only a few hundred transactions each year. A few high value sales can have a big immpact on averages, and we see that in Healdsburg with high price sales at Montage, Mill District and some large country estates. You can still find many Healdsburg homes listed for under $1,000,000, but there are more homes above that level. Please contact me if you would like more specific data on properties or cities you are interested in.