Who'll Be First to $6m?

Posted by Dave Fratello on Wednesday, August 6th, 2008 at 6:50am.

With a couple of recent price cuts, there's now a cluster of 3 Hill Section listings near $7m.

Their total time on market ranges from 90 to 200+ DOM, and each has already cut 10-12% from even more ambitious start prices. But they may need to cut more to make a deal in this market – maybe even another $1m.

We'll describe the homes in more detail below, and ask you to vote in our new poll. The question is: Which of these 3 homes will be first to be priced (or sold) at $6.0m or less?

After voting in the poll, support your views in the comments. Voting will close Friday night at 8pm.

The bad news is that the priciest Hill Section homes just aren't moving these days. (That's good news in earthquake terms, bad news for RE.)

Only 3 homes that were listed on the open market have closed for more than $3m in the first 7 months of this year, and the deal for one of those was made in late 2007. One more huge home is in escrow at $10.9m.

Meanwhile, there are 15 active listings priced at $2.999m or higher. (Click here to download the MB Market Update spreadsheets.) This appears to be a pretty stark case of a supply/demand imbalance, the kind of situation that can drag prices down, even in MB's elite areas.

The 3 homes now priced at $7m which we feature below face the dual challenges of needing to appeal to the extreme upper echelon of buyers – there are, by definition, few of them – and finding themselves in a crowded market full of options for such buyers.

None of our contenders is quite like the other (click highlighted addresses for pics & details via Redfin):
  • 700 8th (pictured at right) is a 5br/5ba, 4925 sq. ft. home built in 2002 that's situated near the top of the hill with some big views. The lot is nearly 10,000 sq. ft. and the back yard spreads nicely all across it. It's a good combination – big home, big lot, big views. The price started in the stratosphere at $8.0m in February. A month ago, it made one big adjustment – a $1m cut to $7.0m. (See "One Cut: One Million.")
  • 114 N. Poinsettia (pictured at top of this story) is a newer (2007) corner-lot home with nice views. The listing touts 5br/6ba and 6400 sq. ft. of living space on a 7500 sq. ft. lot. Not your typical "Mediterranean," this is an inspired Spanish ("Andalucian," per the listing) with lots of great details. The location is a compromise, as the home abuts a fairly busy 4-way stop at 2nd St., and the home's pool is actually in the front yard. This one began at $7.750m in May, and recently chopped to $6.995m.
  • 923 1st is the largest of these 3 homes by quite a bit, at 8000 sq. ft. However, vast amounts of that space are devoted to a huge master complex and a ginormous second-floor entertaining space. The home is not a typical family home, but would be great for a single person or a couple to use for parties and guests. (See "Unpredictable" for MBC's review, and "Call Off the Bump" for a discussion of some curious price changes on the listing in May.) 923 1st began at $7.998m in early January, and has now cut to $7.150m.
Those are the contenders. It's conceivable that the sellers of all 3 are market-testers who will not move with the market and cut to make a deal. They'll sell for the big payday or they won't sell at all.

But if just 1 of these is serious about selling this year or next, MBC would not be surprised to see another $1m come off the one that does make a deal. Would you?
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