Some Haircuts in the Trees at $2m+

Posted by Dave Fratello on Thursday, June 21st, 2007 at 5:15am.

As some closed sale data start to come in from the Spring, we're seeing a few haircuts that got properties sold in the Tree Section in the glutted $2m+ segment.
  • 758 27th - dropped $199k (began 2/5/07 @ $3.099m, closed 5/7/07 @ $2.9m)
  • 3104 Maple - dropped $109k (began 9/20/06 @ $2.599m, closed 6/19/07 @ $2.49m)
  • 637 35th - dropped $149k (began 11/10/06 @ $2.699m, closed 6/17/07 @ $2.550m)
  • 2104 Poinsettiadropped $299k (began 1/18/07 @ $2.099m, closed 6/14/07 @ $1.8m)
Of these, the first three were all new construction, while Poinsettia was a remodel. These three new homes were the only ones (in this segment) listed on the MLS this Spring to close escrow thus far – and they all took cuts.

Now, these cuts were no great strides toward mass affordability. But it's news that builders took somewhat less than they sought, and that efforts to push pricing upward were rebuffed.

Few of the new homes lingering in the $2m+ segment now have taken major reductions, but these sales show that the builders will take less – they'd just rather do it in the context of a negotiation, not by adjusting their list prices.

MBC had chided 3104 Maple for a bogus re-list a month ago when the seller/builder slapped a new MLS number on the property, but didn't bother adjusting the price from $2.549m, where it had been for some time. Alas, just days later the seller agreed to take $60k less than that.

In just the last day or so we have seen some cuts in list prices:
  • 2104 Palm, new construction that began this January at $3.675m, re-listed yesterday; it's now down $376k to $3.299m;
  • 2311 Poinsettia, a remodel that hit the market just last month at $2.149m, re-listed today and took $100k off; and
  • 2709 Oak, new construction near 1 year on the MLS, re-listed today at $2.349m, down just $46k from its $2.395m start.
Perhaps the take-home message for buyers in this segment is: The builders are rational folks, just don't expect that most of them will make the first move.

UPDATE: The sale price on 3104 Maple has been corrected since the initial version of this story was posted.
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