Signs of the Times

Posted by Dave Fratello on Wednesday, March 21st, 2012 at 2:18pm.

Surveying the scene this Spring, in what has emerged as a seller's market, we keep wondering: Were there signs this was coming? Did we fail to connect some dots early on?

Don'tcha kid yourself. No one saw this coming.

Fall 2011 didn't have much of this flavor. Winter saw barren branches – no surprise, there's often a dip in inventory. There were a couple of little frenzies (like with 800 19th), but you could see why those seemed like isolated cases.

But once 2012 got under way, maybe we did start to see some signs. Indeed, MBC has reported on several eye-opening sales, but not always with an emerging pattern in mind.

Now, look at 3 properties in marginal/negative locations in the Hill Section. All wound up receiving multiple offers and going over asking:

303 Larsson (3br/2ba, 1800 sq. ft.) came up at $1.0m.

It's a recently remodeled home with hardwood floors, a nice and modern kitchen, redone baths and plenty of square footage, plus a nice yard. Not bad at all, despite the skinny, small lot (3430 sq. ft.). Sure, 2 of the br were tiny, but...

The market said, "must have," and in a week 303 Larsson got overbid. It closed at $1.1m.

The harder case was the neighbor.

307 Larsson (3br/1ba, 1200 sq. ft.) is an original, small 1950s house on the same kind of skinny lot. It is nothing like the sharp remodel next door. All 3 bedrooms are very small, and the whole house shares one bath. Besides fresh paint and carpet, the house lacks updates.

We called it a "compromised starter home." It has been a rental and it's hard to see much potential for it beyond that, without real work.

But it lasted 10 days after a start at $830k, and wound up getting overbid, too, going substantially higher at $885k.

807 Boundary Place (3br/2ba, 1350 sq. ft.) was an even harder case.

It's barely in MB, for heaven's sake, located on an alley, just a step from "speedway Ardmore" and across the street alley from Hermosa, as we noted in a review.

There's a little, mostly original 1950s house (the kitchen has been upgraded) that we called "mostly frumpy... with a teeny garage and a little yard accessed off the side walkway (the lot is 4525 sq. ft.)."

This one began at $949k, lasted about a month, but now – we hear – wound up with multiple offers and will go over $1m. Another overbid in a marginal Hill Section location. We'll call that a believable rumor for now, but... really?

Welcome to Spring 2012.

Those 3 help make the point, but let's go east of the highway a moment, too.

Did you catch our quick review of 1716 11th (3br/2ba, 2000 sq. ft.) this weekend? We called it "a very challenging visit."

The 50-year-old house is "run-down and cluttered" with a dumpster in the driveway, and plenty more cleanup necessary.

Ignore the clutter, and the old home is in utterly original condition, does not have such a great layout, doesn't take great advantage of that 7500 sq. ft. lot, and – as to location – well, we tried to note the pluses in our review, but it's below average. Everyone can't have A and B locations, or even C locations.

This one has a deal, as of Tuesday night, within 6 days of listing at $949k.

And if that, too, got overbid, watch out.

                                                    * * *

With more inventory, you'd see less of this.

With bad start prices, you'd see less of this.

If there's a single lesson that has been cemented over 5 years of a strange and often declining market, it's that sellers had better darn well price it right.

Now we're seeing quick action with smarter pricing; even buyers saying, no, wait!, you priced it too low.

That's the pattern so far, if you look at the signs.
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