When Words Matter: New Realtor.com® Report Finds Key Phrases in For-Sale Listings Can Lead to Big Savings

Rhea-AI Summary

A new report from Realtor.com reveals that certain phrases in home listings can indicate significant savings for buyers. Nationally, listings with terms like 'Priced to Sell' offer an average discount of nearly $38,000 off the median-priced home. The study found that such 'value' phrases correlate with listing prices 8.5% lower on average than similar homes in comparable neighborhoods.

The impact varies across markets, with discounts ranging from 23.1% in Little Rock, Arkansas, to 3.2% in Orlando, Florida. Southern and Midwestern markets tend to offer the largest discounts. The frequency of these phrases in listings also differs, from 1.9% in Long Island, New York, to 6.7% in Sarasota, Florida. The study suggests that buyers in markets with fewer 'priced to sell' listings may be more sensitive to factors associated with lower prices, such as home condition.

Positive

• Listings with 'Priced to Sell' phrases offer an average discount of $38,000 nationally
• Value-based phrases correlate with 8.5% lower listing prices on average
• Some markets offer discounts up to 23.1% for 'Priced to Sell' listings
• Southern and Midwestern markets tend to offer the largest discounts

Negative

• Discounts vary significantly across markets, with some as low as 3.2%
• The frequency of 'Priced to Sell' listings varies widely between markets, potentially limiting opportunities in some areas

Insights

Market Research Analyst

This report from Realtor.com provides valuable insights for homebuyers and real estate investors. The analysis of "value" phrases in property listings reveals potential opportunities for savings:

• Nationally, listings with phrases like "Priced to Sell" offer an average discount of $38,000 off the median-priced home.
• These listings are typically priced 8.5% lower than similar properties in the same area.
• Discounts vary significantly by location, ranging from 23.1% in Little Rock, AR to 3.2% in Orlando, FL.

For investors, this information can be leveraged to identify potentially undervalued properties. However, it's important to note that the effectiveness of this strategy may depend on local market conditions and the prevalence of such listings in a given area. Markets with fewer "priced to sell" listings may offer more significant opportunities for savvy buyers.

Financial Analyst

From a financial perspective, this report highlights an interesting market inefficiency that could be exploited by astute investors:

• The substantial price differences associated with specific listing phrases suggest potential arbitrage opportunities in real estate markets.
• In top markets like Little Rock, AR, St. Louis, MO and Charleston, SC, discounts range from 15.9% to 23%, representing significant potential savings.
• Even in markets with smaller discounts, such as Orlando, FL (3.2%) and Seattle (3.7%), the savings on high-value properties could be substantial in absolute terms.

Investors and funds focusing on real estate could potentially develop algorithms to quickly identify and act on these "priced to sell" listings, creating a competitive advantage in property acquisition. However, it's essential to conduct thorough due diligence, as these listings may sometimes indicate underlying issues with the properties.

Terms Like "Priced to Sell" Come With an Average Discount of Just Under $38,000 Nationally

SANTA CLARA, Calif., Sept. 25, 2024 /PRNewswire/ -- Homebuyers who are looking for a way to save money while looking for a home, might want to pay attention to key phrases used in listings. According to a new report from Realtor.com^® released today, nationally, listings with the phrase "Priced to Sell" or similar in the listing description come with an average discount of just under $38,000 off the median priced home.

"We have all seen listings with terms like under valued, priced to sell and bargain, and we wanted to find out if those terms actually came with a price reduction," said Ralph McLaughlin, senior economist, Realtor.com^®. "We found there is a relationship between key value phrases and listing prices. For a keen eyed buyer who is willing to spend a little time looking at listings, targeting these key phrases might be a great place to start."

Certain "value" based words used in listing descriptions are correlated with lower listing prices, and can be used to help homebuyers find true bargain properties during their online home search. At the national level, phrases such as "priced to sell," "under valued," "under priced," and "bargain" are associated with listing prices that are 8.5% lower on average than similar homes with similar configurations in similar neighborhoods.

However, this varies substantially across metros, both the discount associated with such phrases as well as the density of listings with them. The average discount ranges from 23.1% in Little Rock, Ark., to just 3.2% in Orlando, Fla., across the 38 markets where there is a statistically meaningful discount. The share of listings with "priced to sell" in the listing description ranges from just 1.9% in Long Island, N.Y., to 6.7% in Sarasota, Fla.

"Much of this variation can be explained by the share of listings with such listing terms, suggesting that buyers in markets with few listings that are "priced to sell" may be more sensitive to the characteristics that are associated with a lower than the usual listing price–such as home condition–than buyers in markets where such listings are more common," said McLaughlin.

Discounts Largest In South and Midwest
Homebuyers in Southern and Midwestern markets can expect the largest discounts on properties listed with "priced to sell" in their listing description. Little Rock, Ark.; St. Louis, Mo.; and Charleston, S.C., lead the pack, where, on average, bargain properties come with a 23.0%, 18.7%, and 15.9% discount, respectively.

10 Metros with Largest Discount on "Priced to Sell" Homes

Market	Average Discount	Median Listing Price	Discount on Median Listing	%  of Listings "Priced to Sell"
Little Rock-North Little Rock-Conway, AR	-23.0 %	$249,900	$57,494.00	2.6 %
St. Louis, MO-IL	-18.7 %	$264,900	$49,476.00	2.7 %
Charleston-North Charleston, SC	-15.9 %	$499,999	$79,558.00	3.9 %
Memphis, TN-MS-AR	-14.5 %	$299,000	$43,262.00	3.0 %
Lake County-Kenosha County, IL-WI	-12.6 %	$399,900	$50,464.00	2.8 %
Nassau County-Suffolk County, NY	-12.5 %	$759,000	$94,662.00	1.9 %
Cambridge-Newton-Framingham, MA	-11.5 %	$779,000	$89,851.00	2.1 %
Tulsa, OK	-11.4 %	$287,500	$32,801.00	3.0 %
El Paso, TX	-11.2 %	$279,000	$31,295.00	2.8 %
Wichita, KS	-10.9 %	$262,000	$28,655.00	3.0 %

On the other hand, markets with the smallest discounts are almost exclusively in Florida and Western markets. Orlando, Fla.; Seattle; and Salt Lake City fall to the bottom of the list, where bargain properties will get you just a 3.2%, 3.7%, and 3.8% average discount, respectively.

10 Metros With Smallest Discount On "Priced To Sell" Homes

Market	Average Discount	Median Listing Price	Discount on Median Listing	%  of Listings "Priced to Sell"
Orlando-Kissimmee-Sanford, FL	-3.2 %	$424,900	$13,497.00	4.8 %
Seattle-Bellevue-Everett, WA	-3.7 %	$800,000	$29,804.00	2.8 %
Salt Lake City, UT	-3.8 %	$565,000	$21,458.00	3.7 %
Austin-Round Rock, TX	-4.0 %	$499,000	$20,200.00	4.6 %
Denver-Aurora-Lakewood, CO	-4.3 %	$609,800	$26,125.00	4.6 %
Los Angeles-Long Beach-Glendale, CA	-4.4 %	$955,000	$42,375.00	4.1 %
North Port-Sarasota-Bradenton, FL	-4.4 %	$489,000	$21,750.00	6.7 %
Washington-Arlington-Alexandria, DC-VA-MD-WV	-5.2 %	$555,000	$28,645.00	4.8 %
Minneapolis-St. Paul-Bloomington, MN-WI	-5.5 %	$394,900	$21,856.00	2.4 %
San Diego-Carlsbad, CA	-5.8 %	$949,995	$54,969.00	3.6 %

Methodology
To determine whether for-sale listings being described as "priced to sell" are actually discounted, we tested whether there is an effect on listing prices with this and similar phrases using a hedonic pricing model. First, we looked at the all single-family homes listed for sale on Realtor.com in the U.S. on August 10, 2024 and identified which ones were described with the words "priced to sell," "bargain," "under valued," "fixer upper," "contractor special," "handyman special," and "under priced."

We then estimated a hedonic model to determine the effect of the bargain term on the home's listing price while controlling for the number of bedrooms, number of bathrooms, square feet, lot size, age, and zip code of each property. This allowed us to estimate how much of a discount properties with such terms were listed for, on average, than similar properties within the same metro without a bargain term. We used a 5% level for statistical significance for interpreting the listing term coefficient.

Only metros where the listing term coefficient was significant were considered true "priced to sell" markets. Among the 100 largest U.S. metros that we examined, just 38 made the cut. We then calculated the average listing price discount for each of these 38 metros. For demonstrative purposes, we use the median listing price from August 10, 2024 to show, on average, the discount in dollars on the median priced home.

About Realtor.com^®
Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

Media Contact: Mallory Micetich, press@realtor.com

 

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SOURCE Realtor.com

FAQ

What is the average discount for homes listed as 'Priced to Sell' according to Realtor.com's report?

According to the Realtor.com report, homes listed with phrases like 'Priced to Sell' offer an average discount of just under $38,000 off the median-priced home nationally.

Which U.S. city has the highest discount percentage for 'Priced to Sell' homes?

Little Rock, Arkansas has the highest discount percentage at 23.1% for homes listed with 'Priced to Sell' phrases.

What is the average percentage discount associated with 'value' phrases in home listings?

The report found that 'value' phrases in home listings are associated with listing prices that are 8.5% lower on average than similar homes in comparable neighborhoods.

Which regions tend to offer the largest discounts for 'Priced to Sell' homes?

According to the Realtor.com report, Southern and Midwestern markets tend to offer the largest discounts for properties listed with 'Priced to Sell' in their descriptions.