Real Estate
Do Overpriced Listings in Old Town Alexandria Sell for Less?
See what happens when sellers overprice their Old Town Alexandria home, even in a hot sellers market!
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Do Old Town Alexandria Overpriced Listings Take Longer to Sell and Ultimately Sell for Less Money?
To answer this question, we analyzed all the homes that sold in Fairfax County 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 large dataset of the most common type of home sold in Fairfax County for this analysis.
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We analyzed the most common type of detached home in Fairfax County, including Fairfax City, Falls Church City, and the City of Alexandria, that sold in 2019: a 4-bedroom, 3 or 4 bath detached home. This was a total of 3,389 homes. We further segmented these homes to only include "Colonial" style homes. This was a total of 1,780 homes. Lastly, we excluded the top and bottom 10% of these homes based on closed sale price to exclude the outliers. This left us with the middle 80% of detached homes. The goal was to create find a large data set of fairly identical homes. In this case we ended up with a dataset of 1,419 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 evenly sized buckets. The first group represented the fastest selling 25% of homes. This group had 293 homes and include all homes where the days on market was between 0 and 4 days. The second group had 417 homes and included all homes where the days on market ranged between 5 to 9 days. This basically tells you that Fairfax County was a sellers market, where half of the most common style of detached homes went under contract in 9 days or less. It also tells you that if a home is priced right, it sells very quickly. The third group had 340 homes and included all homes where the days or market ranged from 10 to 30 days. The last group had 317 homes and included 188 homes where the days or market was between 31 and 60 days and 129 homes that had days on market greater than 61 days. For this analysis we chose to exclude the 129 homes that took longer than 60 days to sell because when more than 90% 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.
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Table 1: Days on Market for Detached Fairfax County Homes
Cumulative % of Homes | Days on Market | # of Homes |
21% of Homes | 0 – 4 Days | 293 |
50% of Homes | 5 – 9 Days | 417 |
77% of Homes | 10 – 30 Days | 385 |
90% of Homes | 31 – 60 Days | 188 |
100% of Homes | 61- 200 Days | 129 |
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 4 days or less, sold for 0.3% above their list price. Homes that sold between 5 and 9 days sold for their asking price. Homes that took longer than 9 days sold for less than their asking price.
Table 2: Median Sold Price to Original List Price for Detached Fairfax County Homes
Days on Market | Sold Price to List Price |
0 - 4 Days | 100.3% |
5 - 9 Days | 100.0% |
10 - 30 Days | 98.6% |
31 - 60 Days | 96.8% |
The data, however, alone does not tell you whether a seller is actually getting less money for their home. For the homes that sold in more than 9 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 Fairfax County Homes
Days on Market | Sold Price to List Price | List Price | Sold Price | Difference |
0 - 4 Days | 100.3% | $679,000 | $685,000 | +$6,000 |
5 - 9 Days | 100.0% | $679,000 | $684,995 | +$5,995 |
10 - 30 Days | 98.6% | $679,999 | $669,900 | -$10,099 |
31 - 60 Days | 96.8% | $697,000 | $662,475 | -$34,525 |
Overall | 100.0% | $679,999 | $678,500 | -$1,499 |
Let’s breakdown the data from this table: Overall the median original list price all these detached homes was $679,999 and the median sold price was $678,500.
Insight #1: Overpriced Homes Take Longer to Sell and Ultimately Sell for Less
The median original list price for the first 3 groups (about 77% of the homes) is roughly $679,000. The first two groups, the homes that sold in 9 days or less both sold for $6,000 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 third group of homes were priced just a tad bit higher, but sold for $10,000 less and took an extra 3 weeks to sell. What the data is telling you is that these homes, had a median original list price that was similar to the other 50% of homes, 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, $10,000 less than the asking price and $8,000 less than the median sold price. In the last group, homes that took up to 2 months to sell, the median original list price was almost $18,000 more and these homes sold for $34,000 less than asking price and $16,000 below 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 14 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, but also increases the seller subsidy at closing. In the table below, we’ve included the average seller subsidies and you can see the longer the home sits on the market, higher the average seller subsidy that is provided to the buyer to sell the house. We’ve also updated the table to reflect the median adjusted sold price, accounting for the seller subsidy. For the homes that sell in less than 4 days, these are the most desirable homes, probably have multiple offers and are netting the same as above. For all the other homes, they are all netting less, so for the homes that sell in 5 to 9 days, they might not be getting multiple offers, but because it is a hot market and they are priced well, they are netting $1,000 more than asking price, not $6,000 as above.
Table 4: Median Adjusted Sold Price for Detached Fairfax County Homes
Days on Market | List Price | Subsidy | Adjusted Sold Price | Difference |
0 - 4 Days | $679,000 | $1,361 | $685,000 | +$6,000 |
5 - 9 Days | $679,000 | $2,024 | $680,000 | +$1,000 |
10 - 30 Days | $679,999 | $3,680 | $665,000 | -$15,000 |
31 - 60 Days | $697,000 | $4,566 | $660,000 | -$37,000 |
Overall | $679,999 | $2,742 | $675,000 | -$4,999 |
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Local View: Old Town Alexandria
If we look locally at Old Town Alexandria, the data follows a similar trend, sellers that correctly priced their homes, ultimately sold faster and for more than overpriced homes. In Old Town Alexandria in 2019, a total of 369 Townhouses sold and the median days on market was 8 days, with 87% of homes selling in 60 days or less. The median close price was $825,000.
Table 5: Median Sold Price for Townhouses in Old Town Alexandria
Days on Market | Sold Price to List Price | Loss/Gain |
0 - 7 Days | 100.0% | |
8 - 14 Days | 99.9% | -$1,000 |
15 - 30 Days | 98.7% | -$10,000 |
31 - 60 Days | 97.5% | -$21,000 |
Overall | 100.0% |
In Table 5 above, the data reveals that homes that went under contract in 7 days or less, sold for 100.0% of its list price, meaning there was no gain or loss as closing.. Homes that went under contract between 8 and 14 days sold for $1,000 below their list price. And finally, homes that took longer than 15 days to sell, ultimately sold for substantially less than their asking price.
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 Old Town Alexandria with dozens of 5 Star Zillow reviews. Click here for Zillow Reviews.
* Data Source: BrightMLS. Information deemed reliable but not guaranteed.