BPOs in a Declining Market: Pricing and Comments That Hold Up

In a stable market, sales from the last six months are a fair guide. When prices are falling, those same sales overstate today's value, and a BPO based on them will not hold up.

Signs the market is declining

• Rising days on market for new listings.
• More price reductions on active listings.
• Sale-to-list ratios slipping below 100%.
• Growing inventory.

Weight recent data more heavily

Favour the most recent sales and consider a time adjustment for older ones. Explain the adjustment in plain terms: "Sales from six months ago adjusted down roughly 2% to reflect declining prices in the area."

Lean on active and pending listings

In a falling market, current listings and their reductions tell you where prices are heading. Your list price should compete with them, not with last spring's sales.

Distressed sales

If bank-owned or short sales make up a meaningful share of activity, they are part of the market. Include or reference them rather than pretending they do not exist.

Marketing time

Extend it to match reality. A 30-day estimate when listings are sitting for 90 days will not survive review.

Say it in the comments

State the trend and the evidence in one or two sentences. Reviewers want to see you noticed.

Related: list price vs sale price.