Percent of Original List Price Received

The What: Percent of Original List Price Received is a ratio between a starting price and a selling price.

The How: The original list price is set at the listing level. First, each sold listing’s sale price is divided by its most recent list price; or, in the case of Percent of Original List Price, by its original list price. Then all of the listing-level ratios are averaged to find the entire market’s average percent of (original) list price.

The Oops: The most common error is to divide the entire market’s average sale price by the average list price and calculate the ratio using aggregated data. But dividing one average by another in this way is mathematically invalid.

Using the fake data set below, Percent of (Original) List Price Received is calculated using the bold figures and not the italic ones.

List Price         Sold Price                   Percent of List Price Received

$250,567           $245,000                               97.8%

$255,569           $251,000                               98.2%

$375,466           $370,500                               98.7%

$334,432           $330,000                               98.3%

$396,881           $390,000                               98.3%

$459,331           $439,500                               95.7%

$521,780           $517,500                               99.2%

$584,230           $575,000                               98.4%

$646,679           $643,000                               99.4%

$709,129           $706,333                               99.6%

Average:          $452,222           $430,555     False: 98.5%    True: 98.4%

The Beauty: In a world with so much beauty, we still find exception with the metric that we affectionately call PCTLP. This metric allows you to assess the pricing power of sellers in any given market, the levels of supply and demand, and the desirability of a market.

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