Do Overpriced Listings in Bowie Sell for Less?

Do Bowie Overpriced Listings Take Longer to Sell and Ultimately Sell for Less Money?

To answer this question, we analyzed all the homes that sold in Bowie in 2019 and looked at the data from several angles. The first part of the question, that overpriced listings take longer to sell, was fairly straight forward to answer. From the data, we could count the number of days a home was on the market and then compare that figure against the actual sold price compared to the original price the home was listed for.

The second part of the question, however, was much more difficult to answer because how can you show that a home ultimately sold for less money? Let me explain. Let say you had two homes that both sold for $500,000. The first home was listed for $490,000, but sold in a few days, over list price of $500,000. The second home was listed for $525,000, but sold in 30 days, less than the list price of $500,000. Both homes ultimately sold for $500,000, but did the second overpriced home sell actually for less money or did it simply sell for what it was worth?

To answer the second part of this question, ideally, we would have two identical homes to compare. The first home would be priced at market value and the second home overpriced. Then we could compare the results based on the sold price of both homes. In real estate, however, no two homes are identical, so we used a dataset of a similar type of home sold in Bowie for this analysis. In this case, we analyzed all the Detached homes in Bowie that sold in 2019, which was a total of 1,059 homes.

Methodology for Analysis:
The first step was to sort of the data by the days on market, lowest to highest. Next, we grouped the homes into 4 groups based off their days on market: less than 7 days, 8-14 days, 15-30 days and 30-60 days. The first group, which included homes that were on the market for 7 or less days, totaled 248 homes. The second group had 233 homes and included all homes where the days on market ranged between 8 to 14 days. The third group had 199 homes and included all homes where the days or market ranged from 15 to 30 days. The fourth group had 182 homes where the days on market was between 31 and 60 days. For this analysis we chose to exclude the homes that took longer than 60 days to sell because when 81% of the homes sell in less than 60 days, there is no reason for a home to just sit on the market without selling and might allude to other issues with the property.

Table 1: Days on Market for Detached Homes in Bowie

Days on Market	# of Homes	% of Homes
1 - 7	248	23%
8 - 14	233	22%
15 - 30	199	19%
31 - 60	182	17%
Overall	862	81%

To answer the first part of the question we calculated the ratio of the Sold Price (SP) to the Original List Price (OLP) for all the homes. We then took the median for each of the four groups. The results in the table below confirm that the longer a home sits on the market, the less a seller is getting for their home. Homes that sold in 7 days or less, sold for 100.7% of their list price. Homes that sold between 8 and 30 days sold for around their asking price. Homes that took longer than 30 days sold for less than their asking price.

Table 2: Median Sold Price to Original List Price for Detached Homes in Bowie

Days on Market	Sold Price to Original List Price
1 - 7	100.7%
8 - 14	100.0%
15 - 30	100.0%
31 - 60	97.6%
Overall	100.0%

The data, however, alone does not tell you whether a seller is actually getting less money for their home. For homes that sold in more than 14 days, the data would seems to indicate that these homes were overpriced, which would explain why they took longer to sell and that they also sold for less than their asking price. This data alone, however, does not reveal if these homes actually sold for less. To determine that we would need to look at both the original list price and the final sold price.

Table 3: Median Sold Price for Detached Homes in Bowie

Days on Market	Sold Price to List Price	List Price	Sold Price	Difference
1 - 7	100.7%	$397,000	$397,000	$2,780
8 - 14	100.0%	$395,000	$390,000	$0
15 - 30	100.0%	$385,000	$380,000	$0
31 - 60	97.6%	$385,000	$375,000	-$9,240
Overall	100.0%	$394,900	$387,250	$0

Let’s breakdown the data from this table: Overall the median original list price all these detached homes was $394,900 and the median sold price was $387,250.

Insight #1: Overpriced Homes Take Longer to Sell and Ultimately Sell for Less
The median original list price for the first group of homes (about 23% of the homes) is roughly $397,000. The first group, the homes that sold in 7 days or less, sold for $2,780 over asking price. These are the homes that are marketed well, multiple offers were probably received and a great real estate agent probably worked to bid up the price of these homes. The last group of homes were originally priced around the median sold price, but sold for $9,240 less and took an extra 4 weeks to sell. What the data is telling you is that these homes, had a median original list price that was similar to the others, but they eventually sold for less money. This is proof that an overpriced home takes longer to sell and ultimately sells for less, in this case, $9,240 less than the asking price and $12,250 less than the median sold price.

Insight #2: The Best Chance For Getting Top Dollar Is Selling In Less Than 9 Days
The longer a home sits on the market, less desirable it becomes in the eyes of buyers. Because homes are flying on the market, if a home sits on the market longer than 30 days, to any potential buyer on the market, they automatically assume something is wrong with the house. This translates to lower offer prices, which you can see above, and also can increase the seller subsidy at closing. In the table below, we’ve included the average seller subsidies .

Table 4: Median Adjusted Sold Price for Detached Homes in Bowie

Days on Market	List Price	Subsidy	Adjusted Sold Price	Difference
1 - 7	100.7%	$9,930	$387,070	-$7,150
8 - 14	100.0%	$9,410	$380,590	-$9,410
15 - 30	100.0%	$1,470	$378,530	-$1,470
31 - 60	97.6%	$1,000	$374,000	-$10,240
Overall	100.0%	$1,170	$386,080	-$1,170

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About Peggy Yee

Peggy Yee is a supervising broker at Frankly Realtors and is a local Top Producer. She has sold over $180 million in sales and was one of Northern Virginia Magazine's Top Realtors since 2015. She has been quoted in the Around Reston Magazine, Washington Post, Money Magazine, Consumer Reports, Zillow, Trulia and Realtor.com. Peggy is 100% committed to making your move the best experience possible! Don't just take our word...Click here to see what Peggy's past clients have to say about the experience working with her from Buyer and Seller Video Testimonials and you'll understand why she is one of the top real estate agents in Bowie with dozens of 5 Star Zillow reviews. Click here for Zillow Reviews.

* Data Source: BrightMLS. Information deemed reliable but not guaranteed.