These Are Cuts?

By Dave Fratello | January 12th, 2011
Officially, the practice of re-listing properties just to reset the clock is frowned upon these days. (Though examples abound.)

So one alternative to a bogus re-list now seems to be a non-cut price cut. Consider a couple of recent discounts.

952 11th (5br/4ba, 5050 sq. ft.) is a long-running listing that was last repriced in mid-January last year at $2.495m. Now, at the same time of year one year later, it's down a whopping $7k to $2.488m.

A chop of $7k on an overpriced listing is barely worth the effort for data entry, but it does magically move the property back into the field of vision for some. (And here MBC's playing the sucker too, no?)

The listing has officially tolled 492 CDOM ("combined days on market"), according to the new, strict calculations by the MLS, though even Redfin still shows only 237 DOM at this writing.

The (big) difference in DOM ties back to the first listing having begun in June 2009, and the most recent re-list having occurred in May 2010. Redfin counts from May 2010; the MLS calculation of CDOM now counts more or less from the start, on account of the fact that the listing hasn't been off market more than 90 days at any time since it began in 2009. (We like the new, severe CDOM calculation standards, and only wish most consumers saw those CDOM figures – even Redfin can't quite go there.)

We should note, again, that the home's a Spanish bought new in May 2004 for $2.150m. It was offered first in 2009 for $2.7m – yikes, big markup, why hasn't that worked? – and has lingered since. As we noted in "Hill Closings - And Issues" back in May 2010, the sale of a very similar home at 1009 8th for $2.040m undercut the price for 11th quite a bit.

In fact, it was undercut by somewhat more than $7k.

2320 Alma (2br/1ba, 775 sq. ft., on a 1750 sq. ft. lot) doesn't have nearly the market history that 11th does. It hasn't even hit 90 DOM – or CDOM – yet.

Still, the cut this week was triple the amount at 11th – a startling $21k, from $1.4m all the way down to $1.379m.

Though the home boasts MB "original" charms and ocean views from something more than a half lot, check out that location – right along 24th near a school. A fairly busy corner for the area. The house is hardly ideal as-is, and, what's worse, the plans for a new home on the site aren't even included – you have to pay extra for those.

The backstory here involves someone's hopes to build a spec or dream home, but those plans haven't panned out. The home/lot was acquired in 2007 in an overbid situation – asking $1.3m, the sellers instead got $1.4m in Nov. 2007. Those were different times.

It's doubtful that the lot is worth what the original sellers asked in 2007 – and there's still quite a chasm between $1.379m and there. Yes, more than $21k. Stay tuned.

844 12th Ct. (4br/2ba, 1600 sq. ft.) has drawn our notice a couple of times here at MBC already.

It's back in part so we can note that it's just taken more than double the chop seen at 2320 Alma, going from $1.275m to $1.230m this week. That's $45k – nothing to sneeze at, we s'pose – even if 3% is not exactly headline news. We'll call it a modest cut rather than a non-cut.

But this one has benefited from a little refreshing in the MLS database. You may be surprised, as we were, given that we first mentioned the listing in early December 2010 (the first public open), that the CDOM even today is only up at 19.

How does that math work? How do you start Dec. 3, and hit only 19 by Jan. 12 the next year?

Well, start with a short-term (canceled) escrow, follow up with a pre-Christmas cancellation, and begin the new year with a re-listing with a new MLS number, and somehow even the strict new sheriff says that's just 19 actual days of market exposure.

But that's CDOM, which most readers won't see. With its re-list last week, Redfin is obliged to show just 6 DOM on the property.

With that noted, at least we can say that this one seems to be the most realistic price-wise of the 3 we're mentioning, but let's see what the market says.


UPDATE: The acquisition date on 2320 Alma has been corrected to 2007 from the 2008 date given in the original version of this post.

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