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Why Closed Sales Aren’t Enough to Price Homes in 2025
Understanding Value in a Shifting Market
Comps are useful, but they’re not the whole story. Here’s how to get a more accurate read on home values in today’s evolving market.
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“Recent sales show history. Listings and pending offers reflect what’s happening right now.”
Closed Sales Show the Past, Not the Present
If you're using recent sales to determine home value, it’s important to realize those homes likely went under contract weeks or even months ago. They reflect what buyers were willing to pay then, not what they’re offering now. Especially in today’s slower market, this timing gap can distort your pricing strategy.
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To understand real-time demand, you need to look at what’s currently listed and what’s going under contract. These are your best signals of where prices actually stand.
Smarter Ways to Evaluate Comps
1. Focus on When the Deal Was Made
The price on a closed sale was typically agreed to at the time of contract, not closing. If the home went pending in April and closed in June, you're looking at spring market pricing. In a cooling market, that can mean values are already lower than what that sale reflects. Adjust accordingly.
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2. Don’t Rely on Just One Example
Avoid basing your opinion on a single pending sale or outlier comp. Look for multiple data points that tell a consistent story. One low pending might be the result of pricing strategy or property condition. A cluster of similar activity is a better indicator of trend.
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3. Expand Your Search When Inventory Is Low
If there are few recent comps, look beyond the immediate neighborhood or expand your timeframe. Study nearby areas with similar characteristics and revisit older sales to see how much change has occurred. In 2025, this type of research is essential because sales volume is down and inventory is scattered.
It May Feel New, But It’s Not
Valuing homes based on listings and pendings has always been a best practice, but it becomes especially important in a declining market. The difference today is that sellers who aren’t used to seeing prices dip may struggle to accept where the market actually is.
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Perspective: How Far Have Prices Come?
Before focusing too much on recent declines, it’s worth remembering how much home values have climbed in recent years. Median price increases since 2020 have been significant. While median values aren’t exact indicators of individual property value, they offer a good starting point for understanding overall equity growth.
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If you're a homeowner, the better question might be: What will you do with your equity now? What lifestyle or financial decisions could this create space for?
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Not All Areas Are Experiencing the Same Shifts
Different cities, neighborhoods, and price points often behave differently. A luxury home in one zip code might be stable while entry-level properties elsewhere are seeing price reductions. In one example, a Folsom home purchased about a decade ago appreciated by over $400,000, while the county-wide trend suggested roughly half that growth. Local context is everything.
In This Arcticle
Learn how to interpret comps with more precision, why active and pending listings matter more than ever, and what to consider when comps are limited or outdated.
Smarter Ways to Evaluate Comps
1. Averages and Medians Don’t Tell the Whole Story
A $160,000 median price increase in Sacramento County since 2020 is a general marker. That number doesn’t apply evenly across all properties. High-end homes likely outpaced that figure, while others may have grown less.
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2. Stay Flexible
Use county trends as context, but let comps in the specific neighborhood guide your pricing. Even a 2 percent countywide decline year over year may not apply to every price range or property type.
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3. Don’t Dismiss the Data Without a Better Alternative
Median and average prices have limitations, especially when higher-end sales skew results. But if you throw them out, you need a replacement. National indexes like Case-Shiller don’t reflect local trends. Tools like Zillow’s local price index can offer additional insight and sometimes align closely with county data.
The best pricing decisions in this market come from understanding the full picture. Closed sales offer history. Active listings and pending offers tell us what buyers are doing today. Combine both, stay flexible, and always account for local trends when determining value.