Report: High Sold-to-List Price Ratio Confirms Bidding War Activity

By: Esther Cho, DSNews.com

Last year, some analysts were speculating the large supply of REOs and shadow inventory would keep the market depressed, but instead, the market is dealing with a lack of inventory available for sale,  Pro Teck Valuation Services noted in its May Home Value Forecast (HVF).

“In reality, the shortage of housing inventory has led buyers to bid more competitively against one another leading to significant home price increases and tighter housing conditions,” said Tom O’Grady, CEO of Pro Teck. “Aside from anecdotal stories, Home Value Forecast shows that one of the most reliable leading indicators to support this theory is the Sold-To-List Price ratio.”

According to the report authors, the sold-to-list price ratio tends to land somewhere in the range of 92 and 98 percent, but in high demand markets, the ratio can exceed 100 percent.

For example, in the San Francisco Bay area, nearly all ZIP codes showed sold-to-list price ratios close to or above 100 percent, confirming stories of bidding wars, according to Pro Teck’s analysis,
On the other hand, the Chicago area’s sold-to-list price ratio pointed to more normal conditions, with much fewer ZIP codes with ratios close to or above 100 percent.

To Read more of this article…