We have implemented Price Insights on listing pages to give potential buyers an understanding of how a specific property's list price compares to the median prices for properties listed on JamesEdition for the same type and the same number of bedrooms.
This is not intended to be a valuation tool, as this is based on list prices, not transaction prices. It is also important to note that this is based solely on listings that are listed on JamesEdition, it doesn't cover the whole market, but rather a representation of the luxury segment of the market.
The Price Insights is merely one tool in a large toolbox to give the buyer an understanding of how the offers listed on JamesEdition compare. There are many reasons why a specific property could be priced higher or lower than the median ask. Pricing unique properties on the higher end of the market is a difficult task and not an exact science, especially in the second home markets where supply might be less liquid and specific property features become more of a price driver than in primary home markets.
Price Insights is solely aimed to be the starting point of a discussion to better understand those price drivers. If the comparison set is large (more than 100 properties) and the difference for a specific property versus the median is large, it can be worth for a buyer to understand better why.
Below we have listed a few potential reasons:
Price Insights currently only take into account properties in the same town or city, which means that it doesn't take into account if specific parts of a locality are priced significantly higher or lower than the median. As a buyer, it can be worth delving deeper into the proximity of water, sights of interest, roads, or anything else that can influence the price upwards or downwards.
Price Insights rely on area measurements provided by the listing agent. If there is a large deviation from the median, it can be worth talking to the agent to understand how area measurements were collected and how they usually are calculated and stated in official registers.
Price Insights does not take into account the land the property sits on. Even though the land is usually priced at a significantly lower rate than built property, if the property sits on a large piece of land that also enables, for example, privacy, hunting grounds, fishing, forest, etc. this can be a significant price driver.
Price Insights currently does not take into account property features. Some property features, like water views, ski-in/-out, pool, etc. add a lot of value to a property. When comparing different properties, it's good for a buyer to note what type of features, materials, views, and more, that a property has to understand why it should be priced differently. Some properties also come with custom-built furniture that can add additional value.
Here is how Price Insights look on a listing page:
You can see the listing price, price per square meter, median area price and area median price per square meter. For this particular listing, the price is higher than the median, however the price per square meter is lower than the median price per square meter.
Here is another example of Price Insights where the listing price and price per square meter are lower than area median price and area median price per square meter.
There might be some reasons why prices are different, and it’s always worth contacting the listing agent for that. In order to know how to contact an agent about a listing please refer to this article.