It's a moment of quiet, hopeful contemplation over at 794 27th
The seller has accepted an offer and the listing has shifted to "backup offer" status, which is to say: now's the time to make a move if you were even thinking of it. (The Redfin link still works at this stage.)
We very rarely mention names here, but we feel freer to mention that the seller is actress Teri Polo
, because one of her agents (of some kind)
got the listing into the local dog trainer's "Hot Property" column
one Sunday. (Their Sunday readership remains higher than MBC's.)
And the listing begins by calling it a "[f]abulous, celebrity owned" home – a strange pitch, to our ears, anyway. ("Pay more because of who's selling it!" is what we take from that.)
We wish buyer and seller well, but the story here is the home's dramatic drop in value.
Two years ago (May 2006), the home was purchased for a cool $2.5m
. That was much too much then.
The listing began this February at $2.599m
, but that was much too much again.
MBC's brief on the home when it was first open said:
[It's] a supercool Asian-modern remodel. Given what they're asking ($2.599m) you should have plenty of chances to see it in the future.
And here was that rare case of an MBC prediction absolutely coming true (!). The listing hung around 4 months and dropped to $2.099m (-$500k/-19%)
before it got sold.
On the face of it, that's a loss of $401k,
and that's before we get the deal price.
No, we don't actually think the local RE market dropped 19% in the past 2 years. (Give it time; we'll talk.)
Ms. Polo overpaid.
And the best explanation is expressed in a simple equation:
Emotion + Cash = Overpayment
No question, 794 27th is a stunner. A very sharp local design/build firm crafted it, technically as a remodel, a few years back. Though it's not our cup of tea, there's no doubt that the "wow" factors could overwhelm a person – enough to overlook the busy intersection that hosts the property, and a couple of other strikes.
If it's a "must have," you "must pay."
Remember that May 2006 was not a bad time in our local market. Just the first hints of buyer skepticism and flattening prices were beginning to be heard. There was plenty of contrary evidence – maybe the local market would keep rocketing forward.
It didn't. Fall 2006 saw a real slowdown, and the Spring 2007 rally was quickly subsumed by the credit crisis last Summer.
794 27th suggests a corollary to the equation above:
Overpayment + Short Hold = Loss
Oh, that seems elementary today. Could MBC have even contemplated this story in 2002-2006?