Some Sellers Have Big Eyes
House prices in small towns may not be what you’d expect
Houses in Glenwood Springs, Colo., sell lower below their asking price than anywhere else in the country, according to one study. Yet, small towns are some of the priciest places, says another report.
Located at the confluence of the Roaring Fork and Colorado Rivers, Glenwood Springs is a town of 20,000 and the county seat of Garfield County. It’s either that residents there have quite an outsized idea of what their houses are worth — or the housing market there just lacks luster.
Whatever the case, properties in the town sold for an average of half their asking prices last year, finds a study by RALH Construction, a builder of accessory dwelling units. On average, houses were listed for $1.4 million but sold for just $704,700, a difference of 49.8%.
Things were almost as bad in Santa Maria, Calif. Houses there were listed at $1.53 million on average but sold for a comparatively paltry $877,000 — 42.8% less than sellers had in mind when they put their places up for sale.
Many people assume small towns offer more affordable housing than big cities, and that’s mostly correct, but not always. Even where houses sold for the largest discounts, the selling price is often substantial.
Indeed, according to a LendingTree analysis, some small towns actually rival big cities when it comes to housing costs. The lender-to-borrower matching service found that Nantucket, Mass.; Vineyard Haven, Mass.; and Jackson, Wyo. are the most expensive small spots in the country with prices that rival those in many major metros.
Houses on average in Nantucket cost nearly as much as those in San Jose, Calif.: $1.114 million vs. $1.387 million, respectively. Vineyard Haven’s houses cost an average of $1.104 million, similar to those in San Francisco at $1.114 million, while Jackson is more expensive than Los Angeles — $954,600 for the average house compared to $825.300.
Of course, those three towns are prime vacation home locations.
On the flipside, houses in Gillette, Wyo., and Williston, N.D. are the most affordable. Homes there run about $266,000 to $268,000, or three times the earnings of their current residents.
In its study, meanwhile, RALH Construction ranked the 10 worst places in terms of sellers obtaining their asking prices for houses. Three cities each in Tennessee and Alabama made the list.
But sellers in big city markets did better — far better. In San Francisco, for example, houses went for 16% over the asking price on average. And in San Jose, they sold for almost 12% above list, on average.
Sellers in much less expensive markets did very well, too, the study found. In Flint, Mich., they pocketed almost 11% more than they’d asked for. Sellers in Cape Girardeau, Mo., got almost 11% more, while those in Rochester, N.Y., received nearly 9% over list.
Still, the news isn’t good for overly ambitious sellers. The contractor found that 96% of the nearly 400 markets analyzed reported median sale prices lower than their original listings. The difference: a whopping $43,000.
Houses sold above asking prices were found in just 14 cities.