Welcome BackPosted on Monday, July 20th, 2009 at 10:45pm.
In 2 cases, we see substantially adjusted asking prices as the reality of our local market has begun to dawn on the sellers. In another, we see the first open recognition that a sale will mean losing money on a fairly recent purchase (2005).
Let's start with the biggest-dollar listing that's now below its 2005 value.
616 29th is a 4-year-old Craftsman home with 4br/5ba and 3500 sq. ft. (MBC has said before that the Craftsman styling seemed to be more around the edges, rather than a real commitment by the builder; we think you'll agree.)
The current owners paid $2.425m new in Aug. 2005. They faced a job transfer and tried to sell for a very small markup in April 2008: $2.475m. Over the course of 5 months, the price came down to dead-even with the acquisition price (a net loss after costs of sale). However, rather than book the loss, the sellers rented out the home last year.
616 29th came back last month at $2.379m, down almost $50k from the purchase price.
The sellers might feel buoyed somewhat by the recent deal made on 700 35th (still in "backup offer" status), a slightly bigger home last priced at $2.349m. (See "Unloading 35th?") That's at least some action in the $2m+ range. The ultimate value on 29th could tie back to whatever the closed price turns out to be on 35th.
On the flipside, a much larger, brand-new home at 660 33rd (5br/5ba, 4475 sq. ft.) is now priced the same at $2.379m – a once-$3m home now hanging out in the same league.
500 14th (3br/3ba, 2250 sq. ft.) is a mid-century-style home with some recent remodeling that boasts proximity to parks, downtown and the beach. Not so eagerly touted in the listing: it's set just above busy Ardmore.
The owners paid $1.290m in August 2004 – that'd be 5 years ago, mid-bubble. Ready to unload for the "right" price, they tried 3 years later – offering it for $1.849m (+$559k/+43%) in Sept. 2007.
That listing logged just 30 days, but it came back at the same price in April 2008. Over 2 months, the price came down a bit to $1.699m (+$409k/+32%).
That listing, too, expired after a short try. Here it is back this week at $1.499m, a comparatively modest markup of $209k (+16%) over a 2004 price.
The market will tell us what the right price is now – if the sellers will meet the market – but one reference point has to be 512 12th (formerly 1148 Ardmore), a 3br/3ba, 2300 sq. ft. total gut-and-rebuild that recently closed for $1.605m. (See "More Tree Closings.") We're thinking that's not a good sign for a price at 14th with a 1.4 in front.
Up on the plateau, they're offering 445 30th again. MBC has previously called this 3br/3ba, 2600 sq. ft. home "a pretty sweet and spacious Spanish, an older home with some additions and nice updates."
An extra bonus for those who may be so inclined: the home and lot next door, to the west, also belongs to these sellers, and they may sell that lot, too. Last year, they also offered to rent out some yard space in the back of the neighboring house to a potential buyer of 445 30th.
In March 2008, this one came up at $1.999m. The price trickled down to $1.795m by July, when the listing simply quit.
Now, a year later, the listing begins anew at $1.575m (-$424k/-21% off last year's start).
When sellers decide to drop out of the market rather than sell at what appear to be dropping market prices, it's surely in the back of their minds that maybe the market will improve, and they'll get a better price – if they just take some time off.
Comparing this year to last year, no, that's not worked out to be the case. Median prices have dropped 17% for SFRs west of Sepulveda in just a year, comparing Jan.-June 2008 with the same period this year. The drop is 22.4% from 2007 to 2009. (See "Pace Slower, Prices Lower.")
Now, if you're going to sell, it's going to be at a markedly lower price than you may have hoped for in prior years. And there's no sense sticking an unduly high price on the listing and hoping for someone to fall in love and overpay – not in an environment of slower sales.
Each of the homes has some real appeal. But to get them sold, in their own ways, each of these sellers is showing some grudging acceptance of the new price environment.
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