Why is the information on pending sales less reliable than information on sold homes?

The information on pending sales is less reliable than information on sold homes primarily because pending sales often reflect the listing price rather than the final sale price. When a property is listed as pending, it is under contract, but the transaction has not yet been completed. Therefore, the listed price might not accurately represent the final price that the property will sell for.

In contrast, sold homes provide confirmed data about actual transactions, including the final sale price, which is a verifiable fact. Relying on pending sales in market analysis can lead to misjudgments about the current market condition, as the final outcomes of those transactions are still uncertain until they are officially closed. This is a crucial aspect for anyone analyzing real estate trends or making decisions based on market data.