Why so many property listings advertised as ‘bargains’ sell above the asking price
A new report from real-estate website Trulia examined how often listings advertised as a bargain were, indeed, bargains. The analysis had some good news for people in one of the country’s most competitive housing markets: Homebuyers had the best shot of finding truthful listings in San Jose, Calif.
In the Silicon Valley city, more than 86% of “bargain” listings were actually priced below the home’s estimated value. Other cities with popular housing markets, such as San Francisco and Seattle, also had a high percentage of true bargains.
‘It’s likely that in typically faster-moving, more-expensive West Coast markets, some sellers may intentionally advertise a low offering price in order to stand out or attract more attention from buyer.’
But even in cities where listings were mostly truthful, a seemingly good deal isn’t always what it appears to be. Roughly three-quarters of homes in the Bay Area of California, which includes San Francisco and San Jose, sold above their original list price.
“It’s likely that in typically faster-moving, more-expensive West Coast markets, some sellers may intentionally advertise a low offering price in order to stand out or attract more attention from buyers, understanding or expecting that homes typically sell for above asking price anyway,” Trulia found.
| Metro | Share of listings priced below value | Average discount | Share of homes selling above asking | Average difference between sales and listing prices |
| San Jose, Calif. | 86.2% | 9.5% | 74.6% | 8.5% |
| San Francisco, Calif. | 83.2% | 10.5% | 76.5% | 11% |
| Camden, N.J. | 78.8% | 21.1% | 16.4% | -6.9% |
| Newark, N.J. | 77.7% | 11.5% | 25.2% | -4.1% |
| Pittsburgh, Penn. | 74% | 11.2% | 15.8% | -7.1% |
| Allentown, Penn. | 72% | 14.1% | 20.2% | -5% |
| Portland, Ore. | 71.8% | 3.8% | 34.2% | -1.6% |
| Lake County, Ill. | 71.1% | 9.3% | 15.5% | -6.1% |
| Seattle, Wash. | 70.1% | 3.9% | 50% | 2.1% |
| Dayton, Ohio | 69.50% | 9% | 20.2% | -4.8% |
Finding a listing advertising a bargain can be something of a fool’s errand, regardless of whether it’s truthful, according to Trulia.
Camden, N.J., had the highest share of listings that described the homes as being bargains, at 7.1% of total listings. Luckily for those shopping for a discount, 78.8% of the “bargain” listings were indeed priced lower than the home’s estimated value.
Meanwhile, Cape Coral had the fourth highest share of homes advertised as bargains, but just 36.5% of those properties had a list price below the home’s value.
| Metro | Share of listings advertised as ‘bargains’ | Share of ‘bargain’ listings priced lower than value |
| Camden, N.J. | 7.1% | 78.8% |
| Bridgeport, Ct. | 6.7% | 56.6% |
| Lake County, Ill. | 6.1% | 71.1% |
| Cape Coral, Fla. | 5.8% | 36.5% |
| Tucson, Ariz. | 5.5% | 64.6% |
| North Port-Sarasota, Fla. | 5% | 42.2% |
| Hartford, Conn. | 4.8% | 42.4% |
| Philadelphia, Pa. | 4.7% | 58.2% |
| Newark, N.J. | 4.6% | 77.7% |
| Phoenix, Ariz. | 4.5% | 53.1% |
Source: marketwatch.com
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