The Housechick Blog

I’ve talked about range pricing effectiveness earlier here, and then again here when we learned the Tucson MLS doesn’t dictate the stated list price when range pricing a home, other than to say the list price must be within the range somewhere.

I’m always curious to see what sort of marketing works best.  After all, the point is to sell homes quickly and for a good price.  Knowing what works and what doesn’t is valuable to me and my Sellers.

So we peek one more time at range pricing.  As the market changes, so must our marketing.  Check out the previous results, then read on.

Over the past 6 months, single family homes only, greater Tucson area:

• 271 out of 3261 homes that sold were range priced, roughly 8%.
• 43% sold for greater than the list price - typically the low end of the range
• Average range between list price and top of range: $21,585
• Average Sales Price for Ranged Priced Homes: $255,841
• Average Sales Price for Non Ranged Priced Homes: $304,122

Let’s look at a smaller area.  Central Tucson had roughly 10% of the sold homes over the last 6 months range priced.

There’s a handful of high end sales in there though, so let’s just look at the under $500k crowd for a second:

I think it is interesting that range priced homes go for 99% of the listed price, while traditionally priced homes go for 95% of list.  Some sellers build in a bit of negotiating room in their price, so perhaps they are expecting to come down a bit, while the range pricers state their estimated negotiating range up front so that offers come in closer to their range.  However, average sales prices and price per square feet is lower across the board for range priced homes.

Last time, when we looked at the Northwest, the range priced homes did better in terms of price per square foot and sales price to list price.  Here we see Central is just the opposite. 

Ultimately, I think range pricing is a marketing tactic, and like any marketing tactic, it requires judicious use.  I don’t believe every marketing technique is appropriate for every home, and certainly that applies to every marketplace as well.  Given current Buyer expectations and our current Tucson real estate market, it would seem range pricing isn’t the best pricing strategy at this time.