The Race to $2.1m, and Then...

Posted by Dave Fratello on Wednesday, October 24th, 2007 at 3:55am.

Several weeks ago, the "lower end" of the Tree Section's $2m+ segment saw much new construction clustering around $2.3m. For instance, at the end of July, there were no new homes under $2.3m, and at the end of August there were 3 under $2.3m.

Now there are 5 new construction listings under $2.2m, and another at $2.249m.

Could this be the beginning of the builder-initiated price movement we've been watching for? (In "Quitter – Bellwether," just last week, we said it seemed that no such movement was happening. What a difference a week makes.)

This new clustering is partly the result of 3 price cuts this week. Let's look at everything at $2.249 and down to $2.0m – remember, these are all new construction (click any address for details):
  • 2105 Oak (5br/5ba, 3250 sq. ft.) began at $2.349m in May. Now at $2.099m (-$250k).
  • 3104 Pacific (5br/5ba, 3200 sq. ft) remains at the $2.149m where it started in late July. (They just pulled a bogus re-list.) No price cuts yet, but MBC noted in this story the price-cutting ways of nearby new homes in 2006.
  • 1417 Elm (5br/5ba, 3000 sq. ft.) [pictured] hopes for $2.175m; this listing began partway through construction, in late August; the pics are better now.
  • 648 35th (5br/5ba, 3600 sq. ft.) began at $2.450m on July 9, but has already cut quite substantially to $2.195m (-$255k in 100 days).
  • 2309 Pacific (5br/4ba, 3200 sq. ft.) is at $2.195m, down $104k from the start in mid-May. (What's with the garish, huge plastic sign in front?!?)
  • 1901 Poinsettia (5br/5ba, 3200 sq. ft.) is at $2.249m, down $250k from its start in late August. (This one has issues, as noted by this MBC story.)
Of all the homes above, 648 35th stands out as the most aggressive. MBC hasn't yet toured the home, so we don't know why it has lingered nor what its issues are. (We're told the interior is uninspired in parts. We invite your comments.)

Here, it's not news when we see a new listing in the Trees at around $2.5m – but it is news if the builders/sellers are acting like they want to make a deal.

Let's be honest – anyone who's now offering a house at $2.2m or so will be ecstatic to get a sale at $2.1m or so. Better to do a deal than hunker down for the winter, accumulating DOM. And as they sell, guess what happens to the remaining listings?
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