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Yesterday we saw that the San Diego Case-Shiller Index has been essentially flat since mortgage rates went up at the end of June, 2013.
Those higher rates may have tempered the frenzy around the coast too, as sales started dropping off in August. But the average pricing has kept rising, now up to $498/sf last month (a 19% increase since July’s $418/sf):
Which segment is driving the average-pricing up?
It’s the higher-end!
Below is the graph for the Under-$1,400,000 market, where pricing has been flat since August – and last month was a blip; the average for February is $385/sf currently:
It’s a rich man’s game – get good help!
The November Case-Shiller Index reading of 194.15 for San Diego was about the same as October (194.07). Today, the December reading was released, at 193.87, which was a decline of 0.1%.
The Y-O-Y number is still a whopping +18.0%, but that should continue to taper off, even if prices go higher. We won’t see another spring with monthly gains of +2%, will we?
San Diego CSI:
The SP models at Del Sur – a limited-edition collection of elegant estate-caliber homes enhanced by generous interiors and expansive outdoor spaces. The Mello-Roos ranges from $6,600 to $7,200 per year, depending upon purchase price and square footage. They have three canyon-front houses for sale currently, all in the $1,220,000s:
For the analytical folks, compare the December 16th data to today’s numbers. On 12/16/13, the two middle categories had the exact same number of active listings. Today, the red-hot $800,000 – $1,400,000 category has 11% fewer listings than on December 16 (though the average LP/sf dropped 6% too), and the $1.4 to $2.4 category has the same number of listings as on December 16th. The potential for frenzy looks limited to just those on the lower end:
North SD County’s Coastal Region (La Jolla-to-Carlsbad)
The UNDER-$800,000 Market:
The $800,000 – $1,400,000 Market:
Tempted to spread the word quietly?
You’ve probably seen realtors who install their for-sale signs well before inputting the listing onto the MLS. Their intent is to hoard both sides of the commission, not to sell for top dollar.
The ’pre-marketing’ of a home diminishes the urgency, which is the vital ingredient to selling for top dollar.
To create maximum urgency, surprise the marketplace with a hot new offering that is decked out, priced right, and easy to see.
Urgency is a selling tool – it gets buyers to make a decision now, instead of hesitating. But any premature leaking of the opportunity drains the urgency. Why? Because there is no fear of loss.
If the home isn’t on the MLS/open market, then buyers won’t feel like they have to decide today. Given the chance to hesitate, buyers almost always will. If they don’t, it’s because the price is less than top dollar.
Other ways to stick a dagger in a top-dollar sale:
1. Letting buyers see the house while under construction. Buyers are looking for ANY reason to pay less, and they focus on everything that isn’t fixed. In addition, the house won’t have the ‘clean’ smell.
2. Not having a specific price. If you are vague about price, buyers will hesitate. If they do offer first, it will be their price, not yours, and one that makes them comfortable.
3. Bluffing about the comps. The most-motivated buyers are experts on recent sales nearby – and have probably seen more of them than you.
4. Not paying a commission. Always offer to pay a full commission to the buyer’s agent. Why? Because if they have an agent, then it doesn’t get messy for the buyers to figure out how to include them. If they don’t have an agent, then it gives them an obvious amount to discount off the price. Buyers want to offer less, but are typically unsure of an exact amount. Giving them an easy way to knock off a little is smart, especially if it doesn’t affect your bottom line (you already added the commission on top of your price, right?).
5. Letting them leave the house. If you are pre-marketing the home, both sides figure that the decision-making will be sometime in the future. Buyers will either cool off, or disengage altogether as time goes on. If you hear yourself say, “Let me know if you have any questions”, then you know top dollar just flew out the window.
Yes, there is a chance that this buyer defies the odds and pays top dollar anyway, just like there is a chance you might win the lottery. But how do you even know if you are asking top dollar?
There is only one way to know for certain that you sold your house for top dollar: Have your house in top-notch condition, make it easy to see, and have a great agent maximize the urgency and work the fear-of-loss in your favor.
I was on CNBC’s Street Signs show today, and Kayla joined me to capture my two lines on video.
They didn’t give me the questions in advance, the TV monitor is out of sight due to the 7-second delay, and the local cameraman had mis-wired the earpiece so I was getting my own voice fed back to me a split-second later.
Click HERE to see Kayla’s behind-the-scenes video.
The segment started with Diana Olick repeating the standard buzzwords from Yunnie on why home sales have dipped nationally – here is her video:
I’m listening to her report in one ear, then it’s showtime. I give my meat-and-potatoes advice that is applicable to every market, coast-to-coast, and the next agent starts on national TV with how he makes his sellers price right.
Which would you prefer to hear?
Which one did you hear?
I hate going first!
Here is how it looked live on CNBC: