Believe in Your Number, or Change Quick

By Dave Fratello | August 3rd, 2018

You're pricing your home for market.

The market value is a range. (All of them fall into some kind of range.)

You settle on a starting price and wait for the fun to begin.

What if no fun happens? What if nothing begins?

Crickets...

Crickets don't buy houses!

Now you have a decision to make: Stick with your list price, or make a change?

We're looking at two recent examples of contrary approaches.

421 23rd Street Manhattan Beach CAThe townhome at 421 23rd (3br/4ba, 2350 sqft.) is a 2006-built, Spanish-inspired home that showed great. (We brought clients through.)

It's on a street where wider lots allow some of the homes and townhomes to be larger than is typical. (In this case, it's 38 feet wide, compared to a standard 30' wide lot for the Sand Section.)

Start price: $2.695M in late February, a good time of year.

The home's pleasant, but the market for townhomes (resales) seems a bit soft.

Time tolled. No deal.

How many times must they have thought: Should we drop the price?

They didn't.

That confidence was rewarded.

After 88 DOM, a buyer brought an acceptable offer.

This week, the sale closed at $2.680M, just $15K below asking.

Everyone involved believed in the property and the pricing, and knew it would simply take a bit of time.

464 33rd Street Manhattan Beach CANow for a counter example, we go a few blocks north to 464 33rd.

This is a 4br/3ba, 2650 sqft. SFR on a full-sized lot (actually 2795 sqft., a slight bit larger than normal).

The start price, out of the blocks, seemed ambitious: $3.500M.

In our open house post 2 weeks ago, we tried to offer the benefit of the doubt:

"If the PPSF seems high at $1,321/PSF, one needs only look at recent sales of smaller homes on smaller lots to see potential comps: 429 27th (3br/3ba, 2000 sqft., $2.812M, late June 2018, $1,406/PSF) and 461 27th (new, 3br/4ba, 2300 sqft., $3.295M, April 2018, $1,433/PSF)."

Turns out, the sellers changed their minds quickly about that big number.

Friday, the price was cut $501K to $2.999M.

That's a very quick adjustment of 14%.

It's fairly rare to see any sale come in more than 3-6% under the start price, although exceptions certainly are out there to prove the rule.

This course correction may have been speedy enough to prevent the listing at 464 33rd from getting stale.

It's still August, not exactly a brisk month for sales usually. But they've given themselves a chance with an asking price that's easier to see.

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