Bristol to Bradford
New research from Zoopla highlights a growing disparity between asking and selling prices for resi across the country. The average disparity ranges from 1.9% in Bristol to 6.3% in Bradford. What does the increase tell us? It could be a sign of a sliding housing market, with offer prices not being marked to market. On the other hand, it could be about vendor aspirations to realise profits that don’t exist. It could also be about price competition among estate agents, with pressure to secure listings pushing up offer prices quoted to clients. For typical homeowners, house sales represent large one-off deals, so there is no question of dropping price to increase volumes. Setting a lower sale price will likely affect the time to sell, but for most vendors, the time cost of money is low, as so longer trades at high prices are typically preferred. Finally, there is what is described in Prospect Theory as ‘reference dependence’; where buyers will appraise the success of their negotiation relative to the reference price, rather than the true value. More simply put, if you don’t ask, you don’t get.