I mentioned in the previous post’s comment section that I thought my advice was conservative in nature. It sounded vague, so here’s more detail.
It’s hard to believe that buyers overlook the low comps created by realtor shenanigans.
Here’s an example, one of many being inflicted on the marketplace every day.
First off, I struggle with the thought that there are still million-dollar houses in La Costa Greens. It’s a neighborhood built and sold at the peak, and the school districts are split between Carlsbad and San Marcos, which means that many potential buyers who may like one school district, but not the other, will likely write off the whole neighborhood.
There have been several homes foreclosed, and many more on the f-list. In short, a neighborhood where you would think buyers would need to be very conservative.
I showed this 3,652sf house to the Cable Girl the other day, listed for $1,095,000:
It has some nice features, even it’s own putting green with real grass.
But we know about this recent 4,193sf sale around the corner. The for-sale sign went up early, the typical “pre-marketing” done by many listing agents, and a couple of days later it went down.
A month later it pops up on the MLS as a sold listing, closed May 28th for $815,100, and marked as a round-tripper:
My job is simple – convince the listing agent to sell the $1,095,000 property in the low-$800,000s – after all, the most recent and bigger comp closed for that right around the corner, isn’t that the new standard? So I get the agent on the phone….
He sold it over the weekend for more than a million!
Mozart is the only guy who was willing to go out on the limb last year and call bottom. If buyers are so motivated that they continue to justify and/or ignore comps like this, he might be right.
Other components of why I am conservative about the real estate market
1. Buyers have access to all the comps – that should make for smarter decisions.
2. There is no easy money – everyone who finances must qualify.
3. I don’t think buyers believe the realtor-mantra, “buy, buy, buy, it only goes up” anymore.
These three items are opposites from the peak, and the additional realtor shenanigans rub salt in the wound. Will the inventory stay tight, mortgage rates stay ultra-low, and plenty of “good-enough” deals come along that even the skeptical stay engaged?