Discounts in the Teens
Posted on Sunday, December 9th, 2007 at 6:49am.We had two sales close in the last few days in the glutted Tree Section $2m+ segment. Buyers got 14% discounts off the original list prices of both homes.
As to 3011 Elm (pictured), an interesting question arose in comments here at MBC. When it was first sold in July '05 for $2.8m, the home was actually listed for $2.595m. There was a bidding war that resulted in the $2.8m price. So, if it has now re-sold for slightly more, at $2.650m, did it really decline in value over these 2+ years?
Obviously the value of 3011 Elm to a willing buyer did change by 5%. Also, time on market stretched out a bit here – almost 200 DOM this round for the same house that had a war last time.
What's most fascinating is that in the Summer of '05, the list price suggested that the market value was under-estimated by 7%, while in the Spring of '07, the value was over-estimated by 14%.
- 2310 Palm (5br/3ba, 3150 sq.ft., new) went into escrow shortly after being featured by MBC (see: "The 1-Year Club in the Trees") in late October. But it's not like the home hadn't had exposure before – it was on public offer for 438 days, starting at $2.699m, closing at $2.325m (-$374k/-14%). Last list was $2.399m.
- 3011 Elm (5br/5ba, 3600 sq. ft., newer) got $2.65m, which is plenty, but here's the thing. It was purchased 2 1/2 years ago – by a pro athlete who has now moved within the Tree Section – for $2.8m. On the face here, the home declined in value by 5% over 30 months. It also dropped 14% (-$445k) from the hopeful price of $3.095m slapped on the listing in early May of this year.
As to 3011 Elm (pictured), an interesting question arose in comments here at MBC. When it was first sold in July '05 for $2.8m, the home was actually listed for $2.595m. There was a bidding war that resulted in the $2.8m price. So, if it has now re-sold for slightly more, at $2.650m, did it really decline in value over these 2+ years?Obviously the value of 3011 Elm to a willing buyer did change by 5%. Also, time on market stretched out a bit here – almost 200 DOM this round for the same house that had a war last time.
What's most fascinating is that in the Summer of '05, the list price suggested that the market value was under-estimated by 7%, while in the Spring of '07, the value was over-estimated by 14%.
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