Price Chops in a Rising Market

By Dave Fratello | April 21st, 2014

Yes, it's possible to overprice in a sellers' market. And it's possible to recover from that as well.

We're looking first at 319 S. Poinsettia (6br/6ba, 4830 sq. ft.), right down at the boundary with Hermosa Beach, which has just made a necessary 10% adjustment to the ambitious $4M start price that we first noted in "How Perspective Changes," late last month.

At four weeks in, it would appear they've had no action on this nice Cape Cod, and they diagnosed the reason. So, off came $400K from the asking price.

It's now at $3.599M, and touted as the "best value" in the Hill Section in the revised listing description.

This home surprised us in 2011 by selling at a notable markup over its 2004 (new) sale price. (See "A Big Markup Over '04.") The 2011 sale was at $2.495M.

The revised price is still $1.1M above 2011, but now positions 319 S. Poinsettia as the least pricey of 4 higher-end homes in the Hills. We'll see if this is enough.

Up in El Porto, there was a recent $100K cut at 312 44th (listed as 4br/3ba, 2700 sq. ft.), which brought that ocean-view TH to $2.600M.

But somehow that hardly felt like a cut.

The price just seems objectively very high for the location. One check point is the acquisition price – new in 2011, this townhome sold for $1.269M. Has it more than doubled in value since? (That's a question we first posed in February in this post.) UPDATE: The day after this post went up, 312 44th chopped another $150K to $2.450M.

We'd also like to better understand the square footage. Builder's data when this home was first listed said the unit was 2681 sq. ft. The county assessor says it's 1630 sq. ft. The current listing says it's 2700 sq. ft. and cites the assessor as the source. (Uh-oh.) Having walked through, we'd believe it if it turns out that the truth is somewhere in between.

As to price, surely they've still got some work to do.

There's one more listing that shot high and is adjusting.

It's a very nicely remodeled 80s original at 3314 Laurel (4br/3ba, 3335 sq. ft.).

Among Tree Section listings, this one is nearly the longest in the tooth at 71 DOM. But that was foreordained with the launch price of $2.750M.

A cousin of this home – same floorplan, less completely upgraded – sold in a flash recently at 2812 Maple. The Maple house is on a very nice block, and the recent retooling of the home did make it sparkle, even though it remained a bit plain-vanilla and, in some areas, retained the vestiges of the 80s build – cabinets, counters, etc. Still, asking $2.195M, Maple didn't chase anyone away.

3314 Laurel probably did keep buyers at bay for a while, but now has made 3 separate price cuts, chopping 13% over that time to $2.399M.

And hey, it's still Spring.

There's still time to find that one buyer every property needs.

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