How About 20% Over? Will That Get It Done?

By Dave Fratello | June 28th, 2022

Whatever someone wants to say about which way the wind is blowing (onshore!), there's no doubt that certain must-have properties still drive buyers mad.

469 30th Street Manhattan Beach CASuch was the case with 469 30th (4br/4ba, 2834 sqft.), a stylishly remodeled, midsized Sand Section home near the end of a charming block of the plateau.

We did note of this property, in our original new listings writeup last month, that it featured "simply incredible design and style around every corner, from choices of tile and surfaces to custom paint work that just makes everything pop. Playfully original."

469 30th Street Manhattan Beach CAIt seemed that the home was both appropriately and attractively priced at $3.495M.

But then...

Well, it was a must-have.

Multiple offers drove one buyer over the edge (but thankfully not off the cliff) and drove the price up to $4.200M, fully 20% over asking.

So we had to ask, how common is a 20%-over-asking sale?

We consulted the computer.

After fidgeting with some spreadsheets, we can say this:

- From Jan. 1, 2020, to June 28, 2022, there were 1,114 home sales in Manhattan Beach

- Only 7 of those 1,114 sales closed 20% or more over asking before 469 30th

- 6 of the 7 were in East Manhattan (yep!!!)

- 2 were full-size lot sales in East Manhattan that began under $2M and sold for $2.400M

- 1 was an East MB major, major fixer with a "come-hither" price ($2.100M became $2.700M, +29%) (1250 3rd)

- 1 was a 2br modern on 36th St. in the Trees (587 36th)

- Not one 20%+ sale occurred in the Sand Section among these 1,000+ sales until 469 30th came along

(Worth noting: The previous Sand Section high above asking - among 2020-22 sales - was Dave's listing at 3420 Alma, which closed 17% over asking late last year.)

Now, if you're a listing agent and you want to be known for all your properties selling far, far over asking, you should list them all for $1.99 and just watch them get bid up.

But in reality, that's not how most agents (or sellers) operate. The list price is meant to be a reasonable guess at what the market will bear. You're considering pros and cons, how a buyer will perceive the property, what the comps say, and so forth.

There's no real glamour in saying "we always sell far over asking price," because the subtext can be read as, "we always underprice our listings, and we can underprice yours, too!"

So when a home sells well over asking, it partly means that the upsides far, far outweighed the downsides you considered in the pricing. Buyers just had to have it, and decided not to pay much heed to any downsides.

469 30th had its "yes, but" features. (Notably, the master bedroom featuring a door to the garage, and its hallway hosting the laundry.) Buyers said "yes," not "but."

So while the winds are blowing, one way or the other, the old rules still apply sometimes. A must-have property will blow past expectations and even make the market appear frothy.

'Cause buyers gotta have 'em.

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