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How Much Over List?

The trend of paying over the list price is increasing.

NSDCC Detached-Home Sales Closed Over List Price

January: 38%

February: 43%

March: 51% (of the first 75 closed sales of the month)

Most sellers and agents are happy just to get 1% to 5% over list which will cover some or all of the commission. There were only four that went double-digit over:

Most % Over List Price

List Price
Sales Price
Percentage Over List Price
$1,900,000
$2,255,551
19%
$1,200,000
$1,350,000
13%
$1,750,000
$1,953,800
12%
$1,095,000
$1,205,000
10%

NSDCC Sales, March 1st-10th: 75

Average List Price: $2,072,379

Average Sales Price: $2,049,937 (99%)

Median List Price: $1,750,000

Median Sales Price: $1,800,000 (103%)

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Market Topics

I love hearing from new readers!

Hi Jim,

I have recently stumbled upon your blog and find it very interesting as I am an appraiser in San Diego. I wonder if anyone has considered that the low inventory levels are in part because home prices are going up so fast why would anyone want to sell something that is going to be worth 10K, 20K, 50K more within just months. For example my home according to Zillow is up 22K in the last 30 days. Something else to consider that I have not seen mentioned….

Are sellers paying attention that closely? If so, then you’re right – it’s possible.  Add that extra supply to the post-covid/Prop-19/usual-spring listings and there could be a real surge. But the worst thing that will happen is there will be 3-4 houses for sale in your neighborhood, instead of one or two.

Do sellers risk it? Most are already making $200,000 to $1,000,000+ profit……are they going to purposely hold out in hopes of picking up an extra $50,000? Maybe, but I’d guess that when and where they are moving probably plays a bigger role in their decision-making.

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Sellers are indeed holding back for some reason.

In the first nine days of March last year we had 148 new listings between La Jolla and Carlsbad, and so far we’ve only had 90 this year.  More will be added to that nine-day total this week, but we’re still well under where we’ve been in previous years. March is when the inventory really picks up, historically:

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The Frenzy of 2013 was red-hot for about a year.  If the same happens this time, it means the market should flatten out by July as rates increase and buyer exhaustion sets in.

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The bump in rates over the last two weeks just threw gasoline on the fire for those who could find a house to buy.  But an extended run-up – especially if we get to 4% – should cool things off.

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I have two closings with buyers this week. One paid $135,000 over list, and the other paid $100,000 over.

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Over the weekend, I had buyers make a highest-and-best offer that was $207,000 over list….and lost.

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There is virtually no transparency – just take your shot and pray. Don’t think, and don’t blink!

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Automated Scheduling of Showings

The industry has been abuzz over Zillow buying ShowingTime, our appointment-scheduling service.

Wouldn’t it be great if Zillow published the number of showings publicly? The intel that could be gathered would be of great interest to buyers, and help enhance the home-selling transparency.

The data is already available.

Buyer-agents who book their appointments to show on the ShowingTime mobile app can see the whole schedule of times already reserved by other agents. It also makes you wonder if listing agents are reserving a bunch of times to make their listing look more popular (no names or other info is given on the app).

If buyers knew how many showings were scheduled, it would help them decide how much to offer.

Same with the number of offers.

The trend is to do less for buyers, so when asked, most listing agents won’t discuss how many offers they’ve received – and they certainly won’t divulge the offer prices.

But they should.

It would give other buyers a number to shoot at, and that transparency alone makes them more likely to hit it, or even offer more.  It’s an old wives’ tale that you can’t divulge – the opposite is stated in the contract:

Another benefit of divulging the number of offers and their terms is you quickly eliminate the non-players.  Most buyers are comfortable offering the list price, and +/- 5%, so why not just tell them that you have an offer that is 12% over list and save them the trouble – and save the listing agent from having to process another offer that’s going nowhere.

You can then concentrate on having the real players compete against one another.

It sounds like an auction, doesn’t it?

Frenzy Report

Del Mar Heights has always been a sexy option – the access to beach/freeway/UCSD is excellent, and two of the best elementary schools in the county are a short walk. Like in other areas, the inventory has dried up, so when this one hit the market, it created a tsunami of interest.  Look at the number of views & saves:

They ended up with 42 offers!

https://www.zillow.com/homedetails/13883-Boquita-Dr-Del-Mar-CA-92014/16764209_zpid/

Talk about perfect timing!  The day after the bidding concluded on the home above, this estate sale hit the market, and about half of the disappointed group ran over here to make an offer:

They received at least 19 offers!

https://www.zillow.com/homedetails/14238-Minorca-Cv-Del-Mar-CA-92014/16764756_zpid/

We can expect both to be in the March double-digit-over-list group at 15% to 20% above.

If three-quarters of those unsuccessful buyers throw their hands up and decide to sit this out for a while, there will still be several competitors frothing at the mouth for the next one – even at $1,500,000+.

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How Much Over List, February

Here are the percentages from January:

Link to January Blog Post

Here are February’s winners:

Most % Over List Price

List Price
Sales Price
Percentage Over List Price
$1,595,000
$2,060,000
29%
$1,300,000
$1,602,000
23%
$1,550,000
$1,825,000
18%
$1,079,000
$1,225,000
14%
$1,395,000
$1,600,000
15%
$899,000
$1,016,000
13%
$1,150,000
$1,300,000
13%
$1,150,000
$1,305,000
13%
$1,350,000
$1,510,000
12%
$1,399,000
$1,561,000
12%
$1,949,000
$2,180,000
12%
$1,900,000
$2,100,000
11%

Those are the only double-digit winners out of 216 sales, and only 43% of the total sold for more than list.

How much crazier could it get if we did auctions?

NSDCC February Stats (so far):

Sales: 216 (+16% YoY)

Average LP: $2,308,952

Average SP: $2,263,457 (98% of list)

Median LP: $1,699,500

Median SP: $1,736,000 (102% of list)

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Frenzy of the Month

This is the property where the listing agent received 50+ phone calls in the first 24 hours on the market.

She raised the list price from $1,595,000 to $1,795,000, but the bidding war persisted.

Ten offers were submitted, and it sold for $2,060,000 cash, or 29% above the original list price!

https://www.realtor.com/realestateandhomes-detail/3212-Circa-de-Tierra_Encinitas_CA_92024_M28960-15742

Hopefully the new owner will split the lot and build $3M homes so more can enjoy.

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Frenzy Report

Full bag of used booties!

More of the crazy this week – here are examples:

The agent reported receiving over 30 offers on this one:

https://www.zillow.com/homedetails/5402-Lodi-St-San-Diego-CA-92117/17192144_zpid/

This house went live on the MLS around lunchtime on Thursday, and by Friday afternoon all 52 showing-appointments allotted for the weekend were booked:

https://www.zillow.com/homes/3504-Rock-Ridge-Rd-Carlsbad,-CA,-92010_rb/69018333_zpid/

I got here early enough to catch the 3:15 agt on her way out, but the 3:30 agent showed up ten minutes late (his clients were on time) and he locks himself inside the house – which is all it takes to screw up the whole schedule. I was the 3:45 appt – I think there were at least five other parties who came after me:

Average % Paid of Last List Price

Nobody is giving them away!

I think we can agree that list prices today are at or above the all-time highs, yet with demand overwhelming the few listings that are trickling out, buyers are forced to consider going even higher. It’s working too:

We usually get some anxious buyers who pay closer to the list price in Jan-Feb, but the average has stayed under 100% in recent years.

With January already pushing 101%, it’s going to get crazier – and this is the Over-$815,000 market!

If you’re the type of buyer that refuses to get into a bidding war, you might have to sit this one out.

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This Week’s Frenzy Report

Two offers that I made on behalf of buyers fell on deaf ears this weekend.

The first listing agent pulled the usual stunt – the blackout, where he doesn’t answer the phone or communicate in any way until the deal is done.  Once he got the winning offer signed, he started answering his phone again (instead of communicating with the losers that he “went in a different direction”).   We had offered full price on a two-day old listing, and lost without any chance to compete. When I got him on the phone, I asked, “You must have sold it for at least $50,000 over list?”, to which he said, “No, $15,000 over”. Some agents prefer to grab the first decent offer, rather than create a bidding war – so get there early!

A listing agent on another new listing told me that he had four offers in hand, and expected a couple of others – and he couldn’t say if he was going to counter-offer. So we made a new offer that was $80,000 over list price, to which he responded, “Just finalized the transaction”, and then emailed me a couple of hours later to let me know that the seller has rejected my offer. Rubbing the losers’ nose in it is another common trait among the inexperienced listing agents too.

This listing agent reported that she had over 50 phone calls between Friday night and Saturday afternoon, so they raised the price by $200,000:

The second-wildest bidding war of 2021 (so far) resulted in the winner paying $2,100,000 cash for this house on January 13th (listed for $1,850,000, and ten offers submitted).  With the frenzy conditions, buyers may try to make a quick buck – don’t be surprised if we see more of this:

We’re not even in the selling season yet – it starts tomorrow!

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