Ceilings Blown Through in New Sales

Every property has a range of potential market value.

This fact is elementary to the process of developing a proper market valuation. There's a low and a high, and you choose a public pricing strategy based on how you expect buyers to react.

Today's market continues to surprise to the upside. Agents and sellers set "ceilings" for the prices they anticipate as the highest possible values, then buyers come in and blow through those ceilings, delivering tens or hundreds of thousands of dollars more.

One of the signature recent examples is 1617 19th (4br/2ba, 1759 sqft.)

This home was in the same family for 60 years, and while it had some additions (bedrooms, a family room), and a fresh coat of paint, it was preeeetttttty dated, and the extent of any renovation by a future owner would be limited only by budget. You'd likely want to hit everything.

It was offered at $1.750M, a very attractive number for the time.

But it also seemed that the market offering price was set much earlier, when the market felt more uncertain, before some of the house prep work was done. (Clearing out, cleaning, painting, staging.)

The $1.750M number felt almost "defensive," a very full and fair price, but not at all what the market would likely bear once the mid-April launch rolled around.

We advised clients that the home would certainly sell over $1.900M, and could hit or exceed $2.000M, based on some older comps and real-time data.

Hahaha, yes, Dave, it did sell over $2M.

Final sale price: $2.101M (+$351K / +20%).

We can say confidently that no one prices a home 20% under what they assume the market might deliver. (Oops, we just read ahead below. Maybe... sometimes?)

At 1617 19th, it's safe to say that what the market delivered blew way through the ceiling that anyone had imagined as a value for the home. Now it's just a market price.

229 Rosecrans Place (3br/3ba, 2068 sqft.) is a different kind of case. 

Here, it was apparent from the start that the listing was priced low to generate immediate, multiple offers. We discussed that in "Ever Try 'Auction' Pricing?"

They began at $2.399M for an ocean-view townhome with upgrades over its original mid-90s condition. 

That was clearly what we call a "come hither" price, and yep, they came.

Final sale price: $2.850M (+$451K / +19%)

Truthfully, that's one we probably would have advised starting at $2.650M-$2.699M, but it would have ended up in the same place, more than likely.

Our Edge office's three most recent listings around the South Bay and SoCal have all drawn offers well above asking price, despite careful attempts to price to market.

114 Via Monte D'Oro (4br/3ba, 2331 sqft.) was listed in early April by our colleague, Melinda Flynn of Edge.

After a light pre-market renovation, the property came out at $1.985M.

True, that was an "early 2023" price, but you don't want to get too far ahead of the market, even if it's changing.

Whoops!

After 10 offers, several all-cash, Monte D'Oro sold 29% over asking at $2.564M.

The price was basically without precedent in the Hollywood Riviera for a home that still genuinely needs more modernization. And yet there were multiple offers near that level.

Meantime, our office just closed one in West LA (3541 Tilden) at $125K over asking (listing agent Adam Wilson).

And we have cleared buyer contingencies on a Brentwood/Mandeville Canyon property (2519 Banyan) that we had listed (Dave Fratello with partner Susan Lau of Coldwell Banker). Banyan drew 5 offers and will close $176K over asking – breaching $3M, which we weren't quite sure was possible.

(The views from Banyan are incredible – see our latest Instagram Reel for more.)

Ceilings blown through all over!