I said on the Frenzy Cruise that I’d also recognize the NSDCC sales that closed well under their list price. It’s good for potential sellers to see how buyers will lowball homes that have been on the market for a while – and encouraging for buyers to know that they might be able to get a deal if they play the game wisely.
These are sales from November, with percentages off their original list price:
There have been 94 NSDCC closings in November (so far), and 34% have been discounted by a double-digit percentage off the original list price – which isn’t too bad, given the negativity everywhere. It happens at all price points too.
Two conclusions from the clusters in graph below:
Once a home has been on the market for 30-40 days, sellers are ready to deal.
Sellers who go beyond 100 days on the market are really taking a chance.
There were 13 of the 32 sales who ‘refreshed’ their listing, or had it on the market this year with a different agent – those DOM are not reflected here. There were quite a few at the -8% and -9% too.
Five of the 32 were round-tripped.
Because it is unethical to deliberately list a home for sale at an unrealistic price, it means that in a third of the cases, the listing agents just flat-out got the price wrong by a double-digit percentage. Can you imagine if doctors, lawyers, stockbrokers, plumbers, or burger-flippers were wrong a third of the time?
I’ve been on a fortunate lucky streak this year, and it’s not going to last forever so if you don’t mind, I’m going to enjoy it while lasts. More than anything, I want to give hope to sellers and buyers that you can make smart and friendly transactions these days.
There have been 80 NSDCC closings in November, which should mean we should get to at least 100 sales for the month. But with only 108 pendings today, the monthly sales in December and January sales will probably be under 100. Even though there are 393 active listings, sellers haven’t been too interested in adjusting their pricing strategies, and most will just wait it out until some unknown date in the future.
Another lady was walking by on Wednesday when we were doing the photos of the new listing. She confirmed that we were selling the house, and replied, “It’s a TERRIBLE time to sell”.
She came back yesterday, and when she heard that I already had three offers, she said, “Well I guess it’s good to get out, because I heard that PRICES ARE GOING TO GO DOWN FOR FIVE YEARS!”
The future is somewhat unpredictable, so let’s just look at how sellers have been operating in 2022.
How do the sellers feel about getting more aggressive about their list prices? If prices were going to decline for the next five years, there should be some evidence already.
Here are the weekly averages of LP/sf by price range in 2022:
Generally speaking, at least 3/4s of the sellers would rather stick to their price and not sell.
I don’t expect that trend to change.
If it were to change, it would be in the off-season when the stragglers who didn’t sell in the spring/summer are motivated enough to accept a lowball deal. But you won’t see it much in the list prices, it will only happen for those who are willing to make low offers.
We had 18 written offers, and only one of them was cash. There were 17 parties were willing to pay the list price or higher, even with mortgage rates around 7%!
I did what was in effect a reverse offer and raised the list price from $995,000 to $1,150,000 once offers started coming in. Then we asked those who were willing to pay at least that much to submit their highest and best offer.
Five parties were willing to pay over $1,200,000, and the winner paid $1,265,000!
The pic above was the street view when we rolled up in February. It took until the middle of October to list it because we waited until everything was perfect and ready to sell – in this market, you have to!
Just as I’m ready to hit the go button on a new listing, I check the realtor hotsheet and THREE other listings provide new market data. Look at how these two dumped on price:
Do sellers wonder if there were any other buyers before dumping 10% and 11% off their price? Beats me, but if they did, lowering the list price in 5% increments promptly would have caused others to surface earlier. Once a listing has been not selling for a couple of months, they are going to get lowballed.
There is an active listing that has been listed at $1,750,000 for the last six weeks on the same street as my new listing. Even though they listed for $2,150,000 on June 24th, they dropped another $100,000 today and are now $1,650,000. It is located close to Carmel Valley Road:
If we would have listed for the $1,675,000 like we planned to do , it would have only caused a standoff. In a market where prices have dropped so precipitously, we want to be the clear front-runner.
We changed our list price to $1,599,000, and will go head-to-head this weekend!
Unless the home is a real trophy property, this isn’t the market that tolerates aspirational sellers. For those who will only sell if they get their price – you should wait this out….and it could take a while.
The high-priced listings might get showings, but mostly to buyers who are considering the better-priced home down the street. It will take another six months and some boost from a strong spring selling season before the listings priced at retail-plus will start selling again. And that’s probably optimistic.
I still think the 2023 Spring Selling Season will be boisterous, and the sales volume will pick up – but generally-speaking, I agree with Zillow that pricing won’t be rising. Here are Z’s latest predictions:
SE Carlsbad 92009
Del Mar – 92014
La Jolla – 92037
Rancho Santa Fe – 92067
Carmel Valley 92130
Less than 1% annual increases in prime neighborhoods? Yikes!
There is nothing wrong with being in Plateau City. Sellers just need to recalibrate and be smart about what it takes to sell a home in this environment:
Hire a great agent.
Spruce up the home.
Utilize effective staging.
Price attractively (be the best-priced active listing).
Make it easy to show.
That’s all – and if you don’t do all five, it’s ok because there’s nothing that price won’t fix!
An example of #1 is the now-famous property for sale in Del Mar on Border. A buyer thought they could get approvals to build a high-end resort there, but it was put to a vote, and the citizens turned it down. A new buyer is now hoping to turn it into apartments.
Why realtors don't get - or deserve - any respect. Our leaders publish articles that make no mention of how much prices have come down. Instead, they pretend it didn't happen. Rates at 5.65%? You can do way better than this - let's get real. @NAR_Research