Where’d They Get THAT Number??
Ever ask yourself that while looking at a new listing whose asking price seemingly bears no connection to market reality?
In my (Realtor’s) experience, a good one-third of the time, the explanation is just one click away — on the property tax statement showing what the owner originally paid for the house.
Yup — they’ll agree to sell only if they can break even (actually, unless they plan to sell it themselves, that will still leave them down 6% to 7%).
And what if the would-be Seller is asking over their purchase price, even though the market may be down 10% to 40% since they bought?
It’s a fair bet that the difference is equal to what they subsequently put into the home.
Unfortunately, historical purchase price (plus improvements) is a very poor proxy for current market value, especially when either: a) a considerable amount of time has elapsed; or b) markets have changed dramatically.