by Jim the Realtor | Nov 7, 2024 | Over List |
The percentage of buyers who insist on paying above the list price has leveled out around 20% over the last three months. Even more interesting are those who pay $100,000+ OVER LIST when so many more are paying $100,000+ UNDER:
PAID $100,000+ OVER LIST: 14 (8%)
PAID $100,000+ UNDER LIST: 63 (38%)
But sales and pricing are strong lately, compared to last year – and note that the average and median sales prices are the highest on the chart (except for the crazy outlier in June):
by Jim the Realtor | Oct 1, 2024 | 2024, Over List
There are so many signs that buyers don’t have to pay over the list price Why do they keep doing it?
- Tired of waiting.
- Don’t want to miss another one.
- Agent only knows to offer more.
- Listing agent gives them the impression that there are multiple offers.
The softness is fairly easy to see.
NSDCC September Sales:
Closed Over the Original List Price: 21%
Closed $100,000+ OVER the List Price: 8%
Closed $100,000+ UNDER the List Price: 46%
The 8% vs. the 46% should be noticeable to even the casual observers, shouldn’t it?
Yet, the favorite pricing metric is back above $2,400,000 (which was April/May 2022 levels):
by Jim the Realtor | Sep 8, 2024 | Jim's Take on the Market, Market Conditions, Over List
The presidential election is less than 60 days away and even if one of the candidates is a clear winner at Tuesday’s debate, the fight will get nasty from here on out.
The distraction is likely to cause potential home buyers to want to wait-and-see. Thankfully, the hope of lower mortgage rates will keep more than just the bottom-feeders in the game – but the serious buyers will have to dig out a deal, because the sellers are being tough on price. Why? They have comps!
It was noted earlier how the market shifted in the middle of May.
In the last 90 days, there have been 531 closed sales between La Jolla and Carlsbad. Their stats:
Median LP: $2,399,000
Median SP: $2,370,000
Median Days on Market: 14
Any casual observer will quickly conclude that the market looks to be in fine shape.
Just the fact that there have been 531 sales sounds pretty good!
But it is easy to miss. What can we learn from the active (unsold) listings?
To derive some conclusions about the overall market conditions, let’s examine the 83 actives priced under $5,000,000 that have been on the market for more than 60 days. After they have been on the market for 2-3 weeks, the showings dwindle down to zero or close, so the market is talking if they’re listening and want to do something about it.
Of the 83, there are 26 who haven’t lowered their price, and three that have raised their price! That’s 35% whose motivation is so low that they’re going to wait until the right buyers come along.
For the most part, those who have lowered their price didn’t do much. We are now in the post-summer soft-and-getting-softer environment, so a meaningful price reduction needs to be 10% or more to get anyone’s attention. Here are samples of the current NSDCC active listings:
Those who have dumped more than 10% and are still unsold are asking themselves, ‘what’s it going to take?’. We just saw that 20% of last month’s sales were still closing OVER their list price – what gives?
The difference is the condition of the home.
The most amazing frenzy of all-time lasted for two years and spoiled everyone. Not only did homes not need to be fixed up much, but the pricing could be sloppy too and yet virtually every house was selling. There were times when 70% to 80% of the homes sold were closing over their list price!
We’ve had an astounding change of market conditions in a relatively short period of time to think that we went from that 70% to 80% to now 20% or less closing over list. It means those 20% are the really spectacular buys, and those seemingly premium listings now need to have aggressive pricing and/or be substantially improved recently to have a shot at getting their price.
Sellers need to be doing everything better. Do more improvements (especially on curb appeal), better staging, premium photography/video, more-attractive pricing, and hire the best agent you can find!
How do you know about the agent? They are talking about the shift, and what to do about it!
Get Good Help!
by Jim the Realtor | Sep 6, 2024 | Over List
The trend of over-list sales is already heading for the off-season. There were just 36 sales (20%) that closed ABOVE the list price last month. Of those 36, there were 16 that paid $100,000+ over the list price.
In contrast, there were 66 sales (37%) that sold for at least $100,000 UNDER the list price.
Man, those are treacherous market conditions! Do you offer $100,000 over or under?
Get Good Help!
by Jim the Realtor | Aug 22, 2024 | Over List
The trend of paying over the list price appears to have stabilized.
The 212 July sales makes it look like there was quite a surge after a couple of slower months, so buyers must have gotten excited! But the median price has settled in at $2,300,000:
The median sales price probably won’t change much the rest of the way in 2024, but sales could bounce around. There have been 110 NSDCC closings so far in August, so it won’t get close to 200 sales this month. But there is a bit of a surge going on right now so September closings could be decent.
by Jim the Realtor | Jul 31, 2024 | Over List |
The over-list sales help to identify the enthusiasm in the marketplace.
Looking back to 2021 and early 2022 on the graph above, you can sense how wild it was with most buyers paying more than the asking price. But since then mortgage rates have doubled, and the insanity has settled down.
The usual seasonal downturn in over-list sales got an earlier start this year. In 2023, they were steady through the summer, with the first sizable drop down to 24% not happening until September.
Last month the over-list sales dropped to 27%, which was the lowest June percentage by far.
The June median pricing looks shocking but it is easy to explain – it was an one-month outlier when the sales of lower-end homes didn’t happen as usual:
NSDCC Sales Under $2,500,000
May: 103
June: 71
July: 117
I included the preliminary July stats below to help demonstrate how the median sales price can bounce around. Your home’s value didn’t go up 14% one month, and then drop 14% the next month – it’s the quirky semi-accurate measuring stick:
Let’s talk about July sales though! After the drastic decline in monthly sales since April, it sure seemed like the market was going to be doomed for the rest of the year. What a rebound!
It could be the last hurrah though as buyers scramble to grab a house in which they can hunker down. There are only 153 pendings today, so the number of monthly sales should resume their descent in August.
by Jim the Realtor | Jun 6, 2024 | Over List
Sales that close over their list price are tapering off now.
It’s not as bad as it was in 2022 when rates began their rise, but you can see that last year the percentage was steady through summer. Maybe our faster start this year exhausted the enthusiasm earlier?
Of the 38% of sales that closed over list, just over half of them were under $2,000,000.
The pricing enthusiasm is cooling off too. Note the relationships between the DOM (days on market) and the discounts below. Exactly NONE of the these homes sold over their list price after they were on the market more than seven days:
by Jim the Realtor | May 7, 2024 | Over List
Even with high prices and rates, home buyers insist on paying over the list price!
It is good to see 200 sales again too – it’s been a while!
NSDCC Monthly Sales and Pricing
by Jim the Realtor | Apr 4, 2024 | Bidding Wars, Commission Lawsuit, Jim's Take on the Market, Over List, Why You Should List With Jim |
This was going to be the big test.
The controversial local brokerage in Los Altos was offering a measly $10,000 commission to the buyer-agents on their listings, most of which were $4,000,000 and up. They listed a similar house on a quiet street about a mile away for $2,988,000 and then marked it pending a week later.
So I followed their lead and priced my listing at $2,995,000 even though mine needed EVERYTHING and was on a heavily-traveled street.
My video tour of my listing HERE.
I wanted to prove that paying 2.5% commission to the buyer-agent would cause a better result.
Theirs closed for $4,200,000 (and was put up for rent for $2,900/mo).
Mine sold for $4,200,000 too, but then our buyer-agent volunteered to cut 1.5% of her 2.5% commission and deduct it from the sales price. In those cases, the lender has to get the appraiser to re-issue their appraisal at the revised price – but she forgot, which delayed closing for another week. I’ve never prayed so hard for an earthquake not to happen!
I don’t know if the agent on the other sale only got paid $10,000 to support her buyer with paying $1,200,000 over their list price, but she deserved more.
But combined with my buyer-agent being so generous, and the other comments at open houses, the agents around the Silicon Valley are so desperate that they are begging for business. The amounts buyers pay over the list prices indicate the same.
I still think my result was better than the $10,000 guy due to our harsh condition and busy street. But I can’t say that the 2.5% made any difference at all.
We can probably come to this conclusion though. In a scorching-hot entry level market, you don’t need to pay much to a buyer-agent, if anything at all. If the buyer-agent is smart, they will have their own agreement with their buyer to cover it.
In areas where the actives-to-pendings ratio is 4:1 or higher (Rancho, I’m looking at you), paying a reward or bounty to a buyer-agent is worth considering. Is that steering? No, it’s America, where paying incentives to get what you want should be legal and encouraged.
by Jim the Realtor | Mar 5, 2024 | Over List
The Over-List buys jumped up to 30% in February as the selling season got an early start in 2024.
The 156 sales in February is the real proof, and the pricing is the highest since the peak in early 2022:
The market is already in full-tilt boogie mode!
