Spence over at the Z Group listed an investment property with an agent in Seattle, who put the home on Zillow – no surprise there:
http://www.zillow.com/homedetails/3808-E-Madison-St-Seattle-WA-98112/48956614_zpid/
The agent also included a 3D tour by Matterport – which has received the usual ballyhoo as the next big thing in real estate promotion. How do you like this manually-driven 3D tour, compared to video tours?
Do you get the feeling that I spend a lot of time in the car?
The comps haven’t mattered much during our frenzied market. But with things settling down a bit, we might see comps matter more.
In March, we discussed who pays more than they should, and why:
https://www.bubbleinfo.com/2015/03/04/verifying-comps/
Today, let’s point out which comps are the most suspicious. Both sellers and buyers should proceed with caution when using these comps:
1. Sales prices above list prices. Bidding wars have been the norm, but the eventual sales price was thrown out there by somebody who was trying to win the contest, not pay market value. They probably waived the appraisal contingency too, so there aren’t any checks and balances in place. Just because one crazy nut was willing to pay that price doesn’t mean there will be others willing to do the same.
2. ‘Sold before processing’. How can it be considered market value if the market never had a say? Rarely do they have a full description or ample photos so you don’t even know what was sold, or why. Sometimes these are high-priced, where you wonder if the seller and listing agent thought they’d never get the same price on the open market. But usually they are lower-priced.
3. Dual agency. When the seller’s agent represents the buyers too, how do you know what happened at the moment of impact? Be wary of those that closed for a deep discount under list.
4. Long-timers. Have you seen those properties that have been on the market for months without lowering their price, then all of a sudden they sell for full price, or close? Sure, the market can come up to meet them, but it just smells fishy to me that buyers wouldn’t demand to pay less for a property nobody else wanted for months.
5. Comps that went pending when hottest (Jan-April 2015). Today’s market is still good, but for the rest of 2015 it won’t be sizzling like it was when rates were 3.67 – 3.77% earlier this year. Buyers are going to want to pay a little less than before to compensate.
6. Weak buyer’s agent on the sale. Inexperienced or desperate agents don’t stop their buyer from over-paying. The inexperienced agents are usually unaware themselves. The tricky ones are the big teams who just use the leader’s name on every sale – but you suspect it was an assistant who handled the sale.
Tip of the Day: Examine the photos from the buyer’s perspective.
Buyers have never relied less on their agent – they have all the comps at their disposal, and they will interpret as they see fit. Your accuracy about the comps is only half the battle – understanding the buyers’ position and how to add value to their interpretation is essential too.
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Call Jim!
We had 126 new listings in the last week, the highest weekly total of the year (and 13% higher than the previous high!). The 58 new pendings were among the lowest weekly totals, and those under that were in January. Yikes!
Click on the link below for the complete NSDCC active-inventory data:
Rob Dawg said, quoting this latines.com article:
“Regular marketing doesn’t work anymore.”
Seems the RE industry is at a crossroads. Marketing or facilitating. One need only read the quote and see which way the wind has shifted.
Houses are worth different prices to different people on different days. Employing a marketing strategy that exploits the initial urgency will produce the max value.
P. S. If all agents offered all the same services, it would force consumers to examine the agent’s expertise and track record.
From the latimes.com:
http://www.latimes.com/business/la-fi-luxury-home-marketing-20150712-story.html#page=1
Rayni and Branden Williams spent months lining up a director, cast and crew for their “lifestyle film.”
The plot line: A husband takes off for a business trip in his Corvette, leaving his wife to invite friends to hang out in their wine room, gym, massage space, movie theater and infinity-edge pool overlooking the city.
But the actors are only a supporting cast to the real star — the $33-million house at 9133 Oriole Way, a modernist mansion with 12,530 square feet of sun-drenched living space nestled in the hills near neighbors such as Keanu Reeves and Leonardo DiCaprio.
And the Williamses are not movie producers; they’re real estate agents. They spent more than $40,000 on the production, just one example of the outlandish lengths today’s high-end agents are willing to go to in pursuit of that big commission. For the Oriole house, the Williamses’ cut could exceed $1 million.
“Regular marketing doesn’t work anymore. We’re appealing to a more sophisticated and savvy group of buyers,” Rayni Williams said. “We’re taking it to a whole other level.”
We changed blog hosts yesterday and lost a post and a couple of comments. But we should be 100% now! There may be some disruption on the mobile app but we are working on it.
Will Chinese investors – in turmoil at home – keep our coastal real estate markets afloat? Hat tip to Susie for sending this in from cnbc:
http://www.cnbc.com/2015/07/09/will-chinese-buyers-flee-or-flood-us-housing.html?
Turmoil in the Chinese stock market could have a quick and direct effect on U.S. housing. From newly built homes in Irvine, California, to Miami condos to Manhattan luxury towers, Chinese money has been flowing freely. The question now is, will trouble in the Chinese stock market translate into more or less cash coming into American neighborhoods?
“My conclusion on China is that those who are buying U.S. real estate are doing it with a very long-term view—to diversify their assets, provide a safe haven in case something happens at home,” said John Burns of California-based John Burns Real Estate Consulting. “I don’t think a 30 percent stock correction after a relatively recent 150 percent boom changes much of that. If you told me the economy was going negative, their shadow banking system was exploding, or the government clamped down on foreign investment, then I would be concerned.”
Here’s the next realtor.com TV ad, which is supposed to be funny. But it’s a serious topic – could some folks be offended?
At the end when you click through using the Find A Realtor button, they just take you to an alphabetical list of agents in your area of interest. I need to change my name to Aaron!
These guys are making the pitch for why potential sellers should list their home (with Jim) and sell now, using NAR stats that show foot traffic is up, and inventory is down:
http://www.keepingcurrentmatters.com/2015/06/29/two-graphs-that-scream-list-your-house-today/
Historically its been said that six months’ worth of inventory is ‘normal’ and demonstrates a healthy market. But it doesn’t take into consideration the buyers’ behavior in a tight-inventory environment, and how the internet has supercharged the dissemination of new listings.
I’d say about 3 months of inventory would indicate a healthy market today.
Let’s break it down by price range too, because different segments are hotter.
NSDCC Detached-Home Inventory:
| Price Range | |||
| 0-$800,000 | |||
| $800-$1.4M | |||
| $1.4M-$2.4M | |||
| $2.4M and up |
Sellers can adjust accordingly – the lower your price point, the more likely you will be able to sell for retail, or retail-plus. If you are in the upper region, you should undercut the competing listings nearby because, well, how should we say it, your market is bloated-plus.
Get Good Help!
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
