Here’s an example of how additional inventory causes commotion in the marketplace.
Over the last couple of years, you could put a home up for sale and not have any competing listings around you – and few, if any, recent closed sales either. Buyers and their agents had a tough time trying to mount a case about value!
Those days have passed.
Now there are guideposts for everyone to enjoy. It is imperative that sellers and their agents pay attention to the recent sales, AND what’s happening during their time on the open market.
When we listed the home above on October 17th, this home (below) was the only one in the same Davidson tract and it was in escrow. The RSF agent said he got close to his list price, but in the Ranch that means within $95,000:
One week into my listing and I’m already facing a $300,000 difference in value between mine that’s listed for $2,500,000, and the slightly smaller home with a view just up the street. Great.
I wouldn’t mind that so much if my listing was spectacular, but ours had a couple of things. Not only did mine NOT have a view, but the backyard was on the north side of the street and this time of year it gets no sun. Plus, this tree on the west side of our backyard assured buyers that any sunshine would be limited:
Backyard view from the balcony off the primary suite:
We did our usual new carpet and paint plus staging, but our sellers didn’t do everything.
You’ve heard my rule-of-thumb: Buyers being asked to pay $2,500,000 should get a built-in fridge. But we opted to go with the alternative, which is what happens when you are thinking about selling your home and your built-in fridge goes out. Do you spend the $18,000 to replace it, or just $1,800 to get by:
The kitchen was already looking somewhat dated, and a fridge that stuck out an extra foot didn’t help.
They did agree to this paint upgrade, which made a big difference. Here is the BEFORE version:
Here is the AFTER, with staging:
We’ve made the home presentable, and now it’s up to me to get it sold.
This was the active listing that I thought would help the most (because buyers are comparing the actives to decide which one to buy). It was smaller but had two bedrooms down, a pool, and visual openess even though you could see power lines in the distance. It was not a Davidson home, and it was priced at $2,525,000 – hey, thanks!
But the agent did a great job on pricing – they dropped their price right as we hit the open market:
On November 7th we get an offer of $2,350,000 from a Redfin agent from Orange County. She was in Rome, of course, and her buyers saw the property when I was doing open house so I was familiar with them.
I thought this might take a few days of negotiation before we can settle up, and I knew we had to scramble.
I had received a call from a different Orange County agent who had never been to Carlsbad, and knew nothing. He had a new listing on the same street as ours but in the Centex tract, which is way different than Davidson. He was fishing around for pricing information, so I told him he should definitely list high.
We countered our buyers at $2,450,000 on November 8th.
Three days later, they countered at their same offer price of $2,350,000, and their agent says that’s all.
But I know them, and I think they have more gas left in the tank.
We countered $2,400,000 on November 13th, and they took it.
On the same day, this hits the market – the OC guy:
At the time, my list price was still $2,500,000 so he undercuts me by 10% to quick sell, which is a very common tactic by listing agents who don’t care about their reputation and see the end of the year approaching fast. He saw me mention Davidson’s Starboard tract, and he didn’t know that he’s not in it. But at his price, it didn’t matter.
Thankfully, our buyers were also from Orange County, and their agent was still in Rome so I dodged that bullet.
Donna carefully managed them through closing and my $2,400,000 stuck!
There was a lot of other action going on in the second half of 2024 which could have complicated our chances so I feel great about our result.
Agents get hammered by solicitors – I get at least 10 calls per day. If I had been casual about the incoming call from the the Orange County agent which led me to discover he’s listing a home that could undercut me, we could have missed the opportunity to tie up our buyers when we did.
Here’s the rest of the action nearby from 2H24:
Just about everyone can find a way to live in 3,000sf to 3,500sf, so homes bigger than that have diminishing value per square foot. Looking at that list, I think we did well!
