Modest House, Bold Move

Posted by Dave Fratello on Wednesday, November 28th, 2007 at 4:59am.


The sellers of 2623 Palm have a message: We are ready to deal.

They've had their modest 3br/2ba, 1950 sq. ft. ranch-style home on the market just 2 months, but they have now taken a post-Thanksgiving cut of $156k, bringing their price down $200k total from its start. Palm is now available for $1.399m. (Click the address above for details via Redfin.)

Think about that – 13% in cuts in a short window of time, much of that coming as the holiday-season slowdown really begins. If the sellers are already chopping like that, they're effectively saying "we'll take almost any offer."

How low can they go? MBC did not quickly find a sales record on the home, but it appears the current owners have held it for a number of years. That means they could have tons of equity and, therefore, flexibility, to go with their evident motivation.

Palm's bold move is terrible news for the rest of the homes lingering in the Tree Section after Turkey Day. One motivated seller like this could really mess up the comps (or, if you prefer, tumble the house of cards, start the dominoes falling...).

Palm threatens to redefine the $1.6m wish-price tier as $1.4m, or below, while making the homes at $1.2-$1.4 all looked overpriced. It's just not very neighborly.

Among the listings that could be most directly harmed, pricewise:
  • 3012 Palm (3br/2ba, 1800 sq. ft.), an apparent flip at 31st/Palm that was purchased for $1.3m this past June. (It never hit MBC's radar so it must have been a private sale or transfer.) The listing touts remodeling work. This one began Sept. 4 at $1.579m, then cut and pulled a bogus re-list with a price of $1.479m. It's smaller than 2623 Palm and has a curb-appeal challenge despite the remodel.
  • 3517 Elm (3br/2ba, 1400 sq. ft.), which entered the market just a month ago at $1.399m, and recently cut to $1.349m. It is 550 sq. ft. smaller than 2623 Palm and the location is another strike. If Elm were priced the same as 2623 Palm by square footage alone, it'd be at $1.004m now. The owners paid $1.045m in Oct. 2004.
MBC noted the other day that 2615 Valley cut $325k to make a deal. We also saw a recent escrow begin at 637 13th after $230k worth of cuts (last at $1.355m). With Palm cutting $200k to attract attention, there's a veritable outbreak of price competition in the Trees, just as folks are beginning to shop for... trees.
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