Selling prices quite a bit lower than asking prices

fret_wimp2

Im doing an informal study of current asking vs selling prices.

Im finding that Selling prices are quite a bit lower than Asking prices, actually over 8% in Dublin and a bit more outside of Dublin.

Im asking if anyone can help explain this, seeing as all we hear in the discussions and on tv is that bidding wars push prices way above asking. The data simply doesn't show that, on average.


Asking prices are coming from MyHome (couldn't use daft for this purpose) and is a snapshot of the data mid February.

Selling prices are coming from Property Price register, and sample is Dec 2017 to present, to keep prices relatively recent. Prices are adjusted for VAT where necessary.

Outliers have been removed so only including property <= €1,000,000


Appreciate any educated guesses or actual industry knowledge to help explain this.

lawred2

fret_wimp2 wrote: »

Im doing an informal study of current asking vs selling prices.

Im finding that Asking prices are quite a bit lower than selling prices, actually over 8% in Dublin and a bit more outside of Dublin.

Im asking if anyone can help explain this, seeing as all we hear in the discussions and on tv is that bidding wars push prices way above asking. The data simply doesn't show that, on average.


Asking prices are coming from MyHome (couldn't use daft for this purpose) and is a snapshot of the data mid February.

Selling prices are coming from Property Price register, and sample is Dec 2017 to present, to keep prices relatively recent. Prices are adjusted for VAT where necessary.

Outliers have been removed so only including property <= €1,000,000


Appreciate any educated guesses or actual industry knowledge to help explain this.

I'm failing to see the contradiction

fret_wimp2

The contradiction is that if you read threads here or listen to general opinion, everything goes for way above asking.

Is everyone really that out of touch with how the market appears to be working?

lawred2

fret_wimp2 wrote: »

The contradiction is that if you read threads here or listen to general opinion, everything goes for way above asking.

Is everyone really that out of touch with how the market appears to be working?

but you've just said yourself that

Im finding that Asking prices are quite a bit lower than selling prices, actually over 8% in Dublin and a bit more outside of Dublin.

fret_wimp2

I see, my bad, very badly placed typo.

Corrected, it, should have read:

Im finding that Selling prices are quite a bit lower than Asking prices, actually over 8% in Dublin and a bit more outside of Dublin.

Del2005

fret_wimp2 wrote: »

Im doing an informal study of current asking vs selling prices.

Im finding that Selling prices are quite a bit lower than Asking prices, actually over 8% in Dublin and a bit more outside of Dublin.

Im asking if anyone can help explain this, seeing as all we hear in the discussions and on tv is that bidding wars push prices way above asking. The data simply doesn't show that, on average.


Asking prices are coming from MyHome (couldn't use daft for this purpose) and is a snapshot of the data mid February.

Selling prices are coming from Property Price register, and sample is Dec 2017 to present, to keep prices relatively recent. Prices are adjusted for VAT where necessary.

Outliers have been removed so only including property <= €1,000,000


Appreciate any educated guesses or actual industry knowledge to help explain this.

Unless you are comparing the ad with the eventual sales price its not a correct correlation.

But what could be happening is that people are now asking too much, say 20% increase, and they are selling for less than the asking price which still gives a 8% increase from last year

cruizer101

Ah was wondering myself, might want to get thread title updated.

Can you share your work in any way for others to see, I'd be interested in looking at it as am in process of looking for house but also have interest in this kind of data and recently did course on data analytics.

Also are you considering location and are some places generally higher or lower.

fret_wimp2

Del2005 wrote: »

Unless you are comparing the ad with the eventual sales price its not a correct correlation.

I agree to a point,but this applies to any sample dataset. central tenancy measures such as mean, median help at least to get a picture of whats going on, from a high level, otherwise no studies would ever get done.

Del2005 wrote: »

But what could be happening is that people are now asking too much, say 20% increase, and they are selling for less than the asking price which still gives a 8% increase from last year

Thats a fair observation. Over 8% in 3 months is lot though.
Figures show a lot more outside of dublin, over the rest of the country.

cruizer101 wrote: »

Can you share your work in any way for others to see

Not really, at least at this point, the data is pretty raw, being munged in python and answers or at least theories need to be found for issues such as this one before making anything available, otherwise its just incorrect.

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whatever76

not in Cork - I can tell you right now anything in a decent location is going WAY above the asking .

eg. Asking 275 - > Sold for at least 325k as I had to bow out at that point !!

fret_wimp2

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Im not, its not a direct comparison.
MyHome data & asking price is a snapshot of property for sale mid feb.
Selling price comes from the property price register and is from Dec 2017 to start of End of February.

Dec and Jan could account for some variation but 8% seems very high.

fret_wimp2

whatever76 wrote: »

not in Cork - I can tell you right now anything in a decent location is going WAY above the asking .

eg. Asking 275 - > Sold for at least 325k as I had to bow out at that point !!

Not being smart, but anything, or just a few desirable properties? has this happened multiple times?
Your statement is exactly why im asking the quesiton, discussions here indicate selling prices are generally above asking.

whatever76

desirable properties within that price range in the city .... happened to e at least 4 times in last 10 month where I kept getting out bid .. even one was a do upper and I had to bale as it was getting to close to my limit for a do upper and needed money to do up and I lost out !

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fret_wimp2

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I dont see how an average price is not a relevant comparison.

Imagine im sampling the number of fish in a section river. Each month i go back to take a new sample, its not the same fish im counting, but im getting a number of samples and over time will get a reasonable average.

If i have 200 properties in an area i can get the average price of those 200 properties. How is it not reasonable to compare this to the selling price of 200 properties in the same area?

GingerLily

Your method is severely flawed........

Lumen

Maybe the expensive ones are not selling!

fret_wimp2

GingerLily wrote: »

Your method is severely flawed........

Perhaps, could you expand a little please so that i might revise it?

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fret_wimp2

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Fair point. PPR data simply doesn't contain that granularity of information, probably best abandon this avenue. Thanks for the help, was is genuinely useful.

Lumen

fret_wimp2 wrote: »

Fair point. PPR data simply doesn't contain that granularity of information, probably best abandon this avenue. Thanks for the help, was is genuinely useful.

You have to match ads against PPR entries. Some on thepropertypin have attempted it. It's hard. Maybe easier now with eircodes?

Are daftdrop and collapso still working?

elainers

fret_wimp2 wrote: »

GingerLily wrote: »

Your method is severely flawed........

Perhaps, could you expand a little please so that i might revise it?

I would agree with GingerLily. The best comparison is individual property ad compared to individual property sales price gap and understand how that gap % tracks across a large volume of sales. 

This doesn't seem to be what you're doing - you seem to be taking asking prices from Feb 2018 and sales prices from December - March 2018. Those properties in the December - March 2018 PPR with those sales prices could have been listed up to a year ago and the prices both asked and paid in the market have increased since then. This would likely account for the gap you've observed.

If you want to take an average from each data source separately, you need to account for the lag effect in some way. And that's difficult as it varies dramatically depending on the property. Time from listing to going sale agreed is likely to vary by property, location and I would imagine season. 

12 weeks has always been the minimum I have heard to go from sale agreed (not from listing) to transfer of the property. In the case of new builds, it can be 9-12 months if build time is required. Probate sales are almost always longer than 12 weeks and anything where a solicitor is slow or a vendor is in a chain will also impact. So the lag in listing to sale agreed to sale date can vary dramatically. 
Then you have the lag in terms of logging the sale price in the PPR. Do agents do this immediately on sale? And if not, what is the lag? 

I'd imagine it's hard to settle on an average time lag so you could correctly time the PPR to Myhome comparison. As a result, I'm not sure you can do what you're trying to do by counting averages at specific times.

davo10

Unless I'm reading this incorrectly, the biggest flaw in your research is that you are applying price comparison in reverse.

I could be wrong, but you are using historical sales data and applying it to currant asking price. Instead of concluding that asking price is going up as time has gone on, you are concluding that sale price in the past is lower than asking price now, then deducing sale price < asking price.

If you want to do a more accurate study, take a snap shop of 200 properties advertised on daft/myhome today, then in 6 months time check the property register to see how much they sold for.

Michael D Not Higgins

Mod note: thread title updated due to typo.

GingerLily

fret_wimp2 wrote: »

GingerLily wrote: »

Your method is severely flawed........

Perhaps, could you expand a little please so that i might revise it?

You cannot and shouldn't directly compare the two datasets, they aren't really comparable. Apples and oranges really.

You don't have the data to prove or disprove what you want.

dudara

I’d also suspect that lower prices are being deliberately recorded on the property register, and there’s probably an element of cash in hand accompanying some sales.

Kyta

My house was on the PPR about 3 weeks after closing date. I am not sure who publishes this, solicitor or estate agent?

dudara wrote: »

I’d also suspect that lower prices are being deliberately recorded on the property register, and there’s probably an element of cash in hand accompanying some sales.

That sounds very risky for both buyer and seller in my opinion, as when the contracts are signed either party can enforce the contract at stated price. Buyer could then say "what extra cash?".

What is purpose of publishing lower prices on PPR? Maybe CGT avoidance for selling of investment properties?

Lumen

Kyta wrote: »

My house was on the PPR about 3 weeks after closing date. I am not sure who publishes this, solicitor or estate agent?

Comes from solicitor's filing of the stamp duty return. Six week limit IIRC. Some transactions don't have stamp duty, those between spouses, civil partners, divorcers etc.

wench

Kyta wrote: »

My house was on the PPR about 3 weeks after closing date. I am not sure who publishes this, solicitor or estate agent?

Neither, it is the Revenue Commissioners.
It comes from the stamp duty return which should be done within a month of the transaction.

Michael D Not Higgins

Kyta wrote: »

My house was on the PPR about 3 weeks after closing date. I am not sure who publishes this, solicitor or estate agent?



That sounds very risky for both buyer and seller in my opinion, as when the contracts are signed either party can enforce the contract at stated price. Buyer could then say "what extra cash?".

What is purpose of publishing lower prices on PPR? Maybe CGT avoidance for selling of investment properties?

The data is a republishing of the price declared by the conveyancing solicitor for stamp duty purposes to the Revenue. A solicitor is very unlikely to misdeclare the price paid however buyers and sellers may do a side deal without the solicitor's involvement. The number of these occurring is small in my opinion.

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whatever76

whatever76 wrote: »

not in Cork - I can tell you right now anything in a decent location is going WAY above the asking .

eg. Asking 275 - > Sold for at least 325k as I had to bow out at that point !!

It totally depends on what and where you are buying!

I just bought for well below the asking price and many of the other properties in the same market are going for well below asking price.

vrusinov

As others said, just an average difference is not a very interesting comparison and does not tell the whole picture. If would be very interesting to see the distribution.

From anecdotal evidence what I suspect is happening is that desirable properties go way above asking price (I've seen almost 100k above!), while there is also a lot of undesirable and overpriced properties that sit on myhome for years until vendor finally budges.
I've been following house in a flood risk area that eventually went for 30-40k under the asking price. Vendor may have hoped to catch some fool not doing their research. It was otherwise a nice house.

Bob24

There are a few reasons why the comparison methodology is flawed, some already listed but I’ll mention another one.

When you look at selling prices from the PPR you have a solid set of data which only includes actual completed transactions whereby there was a serious vendor actually looking at selling. Averaging those means something and can be compared over time. And when you see people posting here about selling prices being higher than asking prices, this only includes this dataset as they are referring to completed sales.

Now when you look at asking prices on MyHome you get a lot of rubbish. There will be ads which are obviously priced too high and have been around for months, people who are just testing the market and don’t really intend to sell, or hell even ads for properties which don't exist or aren't actually one sale (personal experience, including from EAs). Basically the average of these figures means very little unless you know how to exclude ads which will never lead to an actual sale from your calculation (and there are a lot of them). In any case it can’t be compared to your previous average which was only based on serious ads which did lead to a sale.

So the problem is no even just that you’re not comparing like for like properties or are possibly looking at different time periods. It is that you are comparing a reliable dataset to a fairly dodgy one.

If you wanted a real estimate of the gap, you would have to take a sample of completed transactions from the PPR, look-up the original asking prices for those on MyHome (no always possible), and then average actual prices and asking prices for that sample and compare them (by only getting MyHome data for actual transactions you are getting rid of the rubbish, but while much better even that wouldn’t be perfect as some EAs increase the MyHome/Daft asking price as the bidding process is going on - I have seen that done myself - meaning you wouldn’t capture the original asking price).

In short, the reason we only have anecdotal comparisons of asking vs selling and not much aggregated data is that accurately producing high level figure is very hard at best and possible impossible.

Captain Flaps

We've just purchased a property and our final bid was just shy of 15% over asking.