You can say one thing for sure about 1704 Highland (4br/4ba, 3308 sqft.) – it's consistent.
That is, the property's experience on the market seems to repeat a pattern each time it's offered up for sale.
In 5 out of 6 sales of the property since it was built in 2000-01, whoever was selling 1704 Highland overreached, got stuck on the market, and sold later for quite a bit less than their start price.
The most recent example concluded last week, with the townhome closing for $4.150M.
Let's retrace the journey, in chronological order:
Sale 1
Sept. 2000: Listed for $1.550M
Dec. 2001: Sold for $1.150M (-$400K / -26%)
Sale 2
Sept. 2005: Listed for $2.649M
Aug. 2006: Sold for $2.125M (-$524K / -20%)
Sale 3
May 2017: Listed for $4.400M
May 2018: Sold for $3.725M (-$675K / -15%)
Sale 4
April 2020: Listed for $4.200M
July 2021: Sold for $4.000M (-$200K / -5%)
Sale 5
Dec. 2023: Listed for $5.849M
Dec. 2024: Sold for $4.150M (-$1.699M / -29%)
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Nerdy note: The abbreviated presentations above skip over re-listings of the property, focusing only on the first asking price and the final closing price. In some cases, there was a break between re-listings, and the later listing was closer to the sold price. Also, we skipped one quick sale in 2009-10 that was close to asking.
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You'll notice that many of the listed/sold dates are 11-12 months apart, and that 3 of these sales were 20% or more below the initial asking.
There is nothing fun for anyone about deciding to sell, then waiting a year to take a lot less. Nope.
So what might be behind this pattern in the sales of 1704 Highland?
Let's start out by noting that this is a sizable SFR with significant ocean views, and good walkability to downtown.
Those basic assets have driven a strong value for the property over time. It's been remodeled and refreshed in recent years, adding value.
All of those things help, but you can guess that maybe location is a factor that sellers have repeatedly underestimated.
Have you heard about location? It's said to be really important in real estate values. If you've never heard this before, file it away. It could be useful later.
As a seller maps out a wished-for value on their property, they'll look at nearby sales. In the Sand Section, you're always going to have some really glamorous sales, high values... and mostly locations that are not on a busy stretch of Highland.
So when you build a set of comps that features walkstreet homes, or homes along quieter side streets, or maybe up on Alma at the peak of the hill, you're going to see big numbers.
The seller might then think something like, "I don't mind living on Highland. It's not that bad. Maybe we give a little discount, but not too much."
Then, as the pattern shown above seems to demonstrate, the market works its magic.
It turns out, the buyers think they need a bigger discount for Highland. Almost every time. How much? It shows up at the end.
This Story Reminds Us of Something
We were recently helping potential clients to map out a potential value and sale process for their property. (We must withhold the address for now, for reasons that will become apparent.)
In preparation, we checked in on the listing history, much like we just did here for 1704 Highland.
A pattern somewhat like this one really stood out for our potential sellers' property.
We had to say: Every time your house hits the market, the seller thinks it's worth a lot more than it will ultimately sell for. It gets stuck on the market. Sometimes the sellers switch agents, hoping that will make the difference. And every time, the result is the same. They take a lot less.
So our recommendation was to skip the back-and-forth. Price it right, out of the blocks. Don't get stuck on the market, get mad at your agents (which could be us!), then later take even less than you ought've.
You'd like to see that kind of honesty rewarded, and it often is. But here, something pretty interesting/funny happened after our meeting.
Those sellers received a solicitation from an investor. That investor paid cash, netting the sellers just about how much we had suggested they'd get from a properly priced market sale. We congratulated them on making a steal of a deal, with none of the uncertainty of prepping, staging and marketing their home.
The investor then put the property on the market at exactly the sort of inflated price we warned those clients against. (They didn't do any remodeling or prep work beyond paint touch-ups.)
That property is still on the market, now in its 5th month, stuck as ever, not marking down fast enough. When it eventually trades, the investor could lose money.
Those clients recently shared a chuckle, referring to the investor's "buffoonery," not only in the erroneous pricing, but incompetent marketing.
They had never really worried for a day that they had "left money on the table" by taking the investor's offer. We had already told them what could happen if they went public.
Now they're seeing a seller make the same mistakes with their property that all the previous sellers had – except for them. Hence the chuckle.
