No, Don't Raise the Price

By Dave Fratello | July 17th, 2018

1130 Laurel Ave Manhattan Beach CAYou have to call it a happy ending at 1130 Laurel, but wow, did it take a while.

The home is a unique Mediterranean TH fairly near to downtown (and MB Blvd.) that is really quite sizable for the money at 3br/3ba and 2880 sqft.

It first came to market in August 2017 asking $2.249M.

But within a week, the seller wanted the price bumped up almost $100K to $2.335M.

Thus began a journey spanning two listings over 11 months.

Raising the price like this can send confusing messages to potential buyers, suggesting the seller isn't realistic on price or simply is not too motivated.

It's enough to make a buyer pause and say, "huh?"

1130 Laurel Ave Manhattan Beach CASellers, you don't want your potential buyers pausing and saying, "huh?"

You want them to say "wow!" and write an offer.

 

So here's how the story played out at 1130 Laurel:

Aug. 3, 2017: Launched at $2.249M

Aug. 9, 2017: Raised price to $2.335M

Aug. 29, 2017: Dropped price to $2.299M

Sept. 26, 2017: Dropped price to $2.275M

Dec. 1, 2017: Quit the market

Jan. 26, 2018: Re-launched at $2.275M

March 8, 2018: Cut $8K to $2.269M

May 30, 2018: Made a deal

July 17, 2018: Closed for $2.240M, -$9K from Aug. '17 start

Was the price increase the only issue? No.

For one thing, the price in general seemed hard to grasp. The next-door neighbor at 1126 Laurel (smaller at 2130 sqft.) had sold for $1.775M (that's the tax-reported price) in early 2017, in a family-to-family transaction. So this was a step up for the only truly comparable property - the neighboring unit. Also, the asking price exceeded the values on brand-new townhomes across the street (all smaller, but still...). And the unit itself, while modern and spacious, just didn't do it for everyone. It's unique and needed the right folks. 

One thing we're sure of: They didn't get more after raising the price. They took less in the end.

We're midway through the story of a different listing that has raised its price.

420 5th Street Manhattan Beach CADown in the South End on the family walkstreets, values have been bananas for several years now. Sales of new homes, cottages and lots have been brisk.

But for some reason, the cottage at 420 5th (4br/2ba, 1350 sqft.) isn't moving.

They brought it out at the right time of year, late February.

Was $3.699M a bit ambitious to start? Sure.

But there had been walkstreet cottages that sold for that much and more. For instance, 400 9th sold immediately in Spring 2017 for $3.799M.

And what are we going to do here, get into a philosophical debate about which of the 7 family walkstreets is "better" or "best?"

Evidently surprised that 420 5th hadn't sold after 6 weeks, they raised the price $129K to $3.828M.

Even after some price cuts, 420 5th didn't go below its actual start price until cutting to $3.680M in late May - three months into the listing.

417 5th Street Manhattan Beach CAAnd clouding the situation was a sale right across the street.

A fully built, very nice Cape Cod at 417 5th (4br/5ba, 3625 sqft., a 2004 build) closed for $4.999M. The number looked quite low for what the home was. And it was only $1.171M higher than the price at the time on the prospective lot across the street at 420.

You can't build a comparable house for $1.171M. This was a hit to the land value for 420 5th.

Today 420 5th is down to $3.499M. It has taken 4 1/2 months to get $200K under the start price.

There's a market for the house and the lot for sure, but finding that level was only complicated by that price increase in mid-April.

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