The Truth About Off-Market Sales in San Diego Real Estate
Updated: May 4
There’s been a growing narrative in real estate that selling off-market or “quietly” can lead to better outcomes for sellers. Some recent academic work even suggests a small price premium for private listings. So, I decided to test that idea locally using real data. Not theory. Not national averages. Actual sales in 92117 (Clairemont), San Diego over the past 24 months.
Analyzing the Data
Two groups of homes were analyzed:
1. Off-market / 0 days on market
21 detached home sales
Verified as true 0 DOM
2. On-market (public MLS exposure)
375 detached home sales
Same criteria: 3+ bed, 2+ bath, 2+ parking, same area and timeframe
The Headline Numbers
Off-market sales (21 homes)
Average sold price: $1,115,167
Median sold price: $1,000,000
Average sale-to-list ratio: ~97.6%
On-market sales (375 homes)
Average sold price: $1,336,373
Median sold price: $1,255,000
Average sale-to-list ratio: ~99.6%
Comparing Similar Homes
After matching homes by:
Bed and bath
Square footage
Location
Timing
The pattern was consistent:
Off-market homes sold for ~$126 per square foot less on average
Median difference: ~$152 per square foot less
Off-market homes sold for ~$175,000 less on average
Median difference: ~$191,000 less
Even when isolating similar “Mount” street homes:
Off-market homes trailed by ~$184 per square foot
And roughly ~$244,000 in total price
What This Actually Means
This is not subtle.
Homes exposed to the open market consistently achieved higher prices.
There is no evidence here of an off-market premium.
The Hidden Story: Follow the Flips
Several homes in this dataset sold, then resold shortly after. Examples include:
4432 Mount Castle Ave: +$290,000
4793 Leathers St: +$505,000
3840 Tomohawk Ln: +$475,000
3036 Driscoll Dr: +$440,000
Average gain: ~$324,000. Yes, there are renovation costs. Yes, there is risk. But the pattern is consistent.
Flippers aren’t creating all of that value — they’re capturing value that wasn’t realized the first time.
The Only Study Supporting Off-Market “Premiums”
There is one widely circulated academic paper:
👉 Pocket Sales in the Housing Market: Selection, Outcomes, and Policy Implications; https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6359754
This study suggests:
A ~1.6%–1.7% “premium” for off-market sales
Driven by higher sale-to-list ratios
Attributed to avoiding negotiation and price reductions
This is the only study I could find that clearly argues in favor of off-market results.
Why That Study Falls Short
1. It Measures Price Retention, Not Price Maximization
Selling at or near list price does not mean you achieved the highest price. It simply means:
You didn’t negotiate down.
That is fundamentally different from:
Exposing the home to multiple buyers and driving the price up.
2. It Likely Reflects a Data Artifact
In real-world practice:
Off-market deals are often negotiated first.
Then entered into the MLS afterward.
With list price set at or near the agreed price.
Result:
Sale-to-list ratios look artificially strong.
The “premium” becomes a function of reporting, not performance.
3. It Cannot Isolate Causation
Even the study acknowledges:
Selection bias
Agent quality differences
Property differences
So even if a small premium exists:
It cannot prove that the off-market strategy caused it.
What the Broader Research Shows
When you zoom out, the weight of evidence points the other direction. A large Bright MLS / Drexel University analysis found homes listed on the MLS sold for ~17.5% more than off-market properties https://www.effectiveagents.com/resources/pocket-listings-explained-off-market-homes-pre-mls-deals-and-the-hidden-cost-of-exclusive-listings.
Industry research consistently shows:
Larger buyer pool = higher price
Competition drives outcomes
Limited exposure reduces bidding pressure
Even industry surveys show many experienced agents are skeptical of private listings because they limit buyer access and competition https://nationalmortgageprofessional.com/news/agents-take-dim-view-private-listings-majority-avoid-them.
The Bigger Question: Why Is This Being Pushed?
If off-market sales don’t clearly benefit sellers, why is there such a strong push right now? The answer is simple: Control. Large brokerages and platforms benefit when:
Listings stay inside their ecosystem.
They capture both sides of the deal.
They reduce reliance on shared marketplaces.
Private listings:
Increase internal deal flow.
Improve margins.
Strengthen platform leverage.
The strategy benefits the brokerage. Not necessarily the seller.
The Fair Housing Problem
There’s also a serious issue here that often gets ignored. When homes are sold off-market:
Exposure is limited.
Access is restricted.
Opportunities are uneven.
This creates real fair housing concerns. Private listings:
Reduce transparency.
Limit who even knows a home is available.
Can unintentionally exclude qualified buyers.
And importantly:
They make discrimination almost impossible to detect.
Fair housing organizations have long argued that open MLS systems are critical because they:
Ensure equal access.
Create transparency.
Protect against selective marketing.
Private networks do the opposite.
The Real Conclusion
The academic study raises an interesting point about negotiation dynamics. But when tested against real, local data:
There is no clear evidence that selling off-market produces a higher price.
What the data actually shows is this:
Off-market sales reduce risk and variability.
On-market sales create competition and higher ceilings.
The Bottom Line
If your goal is:
Speed
Privacy
Simplicity
Off-market can make sense. If your goal is:
Maximum price
Full exposure
Competitive bidding
The data is clear.
The open market still wins.
And the current push toward private listings?
It’s not about maximizing your price. It’s about controlling the transaction.
This isn’t to say sellers shouldn’t have the right to market their home privately or accept a lower price. They absolutely should. But they should also clearly understand the trade-offs they’re making.
And when I hear privacy cited as the primary reason, it raises a fair question. How private is a sale that ultimately becomes part of the public record? The transaction, price, and ownership transfer are all recorded and accessible. So while the marketing may be limited, the outcome itself is anything but private.
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