Why Only Looking at Sold Comps Is Bad Business

Why Only Looking at Sold Comps Is Bad Business

When most people think about pricing a home, they think about sold comps — what similar homes have actually closed for. That is a reasonable starting point. Sold comps are confirmed, clean, and they are what appraisers anchor to.

But if that is the only data you are looking at, you are working with half the picture. And in a market that is moving, half the picture can cost you.

Sold Comps Tell You Where the Market Was

A sold comp tells you what a buyer was willing to pay for a home at a specific moment in time. That moment may have been two months ago. It may have been six. A lot can change in between — buyer demand, inventory levels, interest rates, seller competition.

When we prepare a CMA — a Comparative Market Analysis, the process we use to determine where to price a home — sold comps are the foundation. But they are not the whole story.

Active Comps Tell You Where the Market Is Right Now

The homes currently on the market show you what sellers believe buyers will pay today. And more importantly, how buyers are actually responding to those listings tells you whether those sellers are right.

When you look at active comps carefully, a few things reveal themselves quickly:

Are prices being cut? How many days have these homes been sitting? What are sellers asking per square foot versus what buyers have actually paid? These signals together tell you whether the market is moving or stalling — and where the real disconnect is between seller expectations and buyer reality.

In data I recently pulled for a listing appointment in the 85086 zip code — every home between 4,000 and 4,500 square feet over the past year — here is what I found:

Sellers are currently asking about $317 per square foot. The homes that actually sold this summer closed at around $275. That is a meaningful gap. Five of the six active listings have already cut their price. Homes on the market right now have been sitting an average of 87 days compared to about 60 days for the homes that sold. And so far this fall, nothing in this size range has gone under contract.

Each of those on its own is just a number. Together they tell a clear story: buyers are not meeting sellers where they are asking, and sellers are starting to adjust.

The Full Picture — What's Moving and What's Not

The last piece is looking at what is under contract or pending versus what is still sitting active. This is where you can really start to understand why.

If homes are going under contract quickly in one price range but sitting in another, that tells you where buyers are comfortable and where they are not. If a home has been active for months with no contract, that is a signal — whether it is price, condition, location, or some combination. And when you see a cluster of homes all sitting at similar price points with no movement, that is the market drawing a pretty clear line.

This is how you track direction. Not just where things have been — but where they are headed and why.

Now Put Yourself in the Buyer's Seat

Here is something sellers do not always consider. The moment a home hits the market, a buyer searching in that price range and size is going to see it right alongside every other active listing that fits their criteria. They are not thinking about what sold six months ago. They are looking at what is available today and asking themselves which one makes the most sense for their budget right now.

That means active comps are not just data points. They are your competition. Understanding how your home compares to them — on price, condition, and presentation — is how you position yourself to win that comparison instead of becoming the listing that helps sell the one next door.

What This Means for Sellers

Pricing based only on sold comps can leave you chasing a market that has already moved. The sellers who do well are the ones who understand both sides of the data — where the market has been and where buyers are actually showing up today. That is what allows you to price a home to compete from day one instead of spending weeks adjusting to a reality that was already there.

What This Means for Buyers

The same data works in your favor. When you see price cuts, long days on market, and a widening gap between asking and closing prices, that is leverage. Understanding how to read both sold and active comps helps you identify where the real opportunity is — and where sellers are still catching up to the market.

If you want a custom analysis like this for your home or a neighborhood you are watching, I am always happy to put one together with you.

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