Month: October 2012

Sellers must be realistic when setting their home’s price

Sellers can be very unrealistic about price. There are several problems with this, some obvious, others not so obvious. For the most part, the reason for this is what is called the endowment effect. Behavioral economics studies find that humans tend to overvalue their possessions compared with the value the market will actually bear for those possessions. It’s important for home sellers to remember that it’s no different with cars than it is for real estate.  An educated buyer is extremely unlikely to make any offer on a property when they can purchase a comparable property for a lower price. Of a group of comparable properties, you as a seller want to be priced slightly lower than the rest. When you price higher, or even at the same level as everyone else, a couple of things happen:

1. The few buyers that may be interested in your home, have done their homework and put their time in to know the market, see your home and move on, unlikely to revisit as the excitement of your property being a new listing has subdued. Most of the potential buyers now viewing your home are not in the final stage of buying and are unfocused.

2. Your home doesn’t get exposure to those buyers that know the values and are searching for the right deal on the internet under a certain price point.

3. One of the comparable homes to yours decides to lower their price, and sells. As a result, the value of your home and it’s comparables is brought down even lower.

4. When you finally come to a point where you decide to lower your home to the right price, you’ve lost momentum, and the extensive time on the market results in your loss of negotiating power. This often results in a lower final selling price than what you would have received had you only brought the home to market at the correct price originally.

It is important to remember that there are 2 ways to price your home. To sell it, or to sell somebody else’s. Are you with me? You can’t change the value of your home simply because you want more money for it. The value of your home generally remains the same regardless of your agent. You as a seller only have control of 3 things;  price,  terms  and condition of property .

 

September Market Update

September surged forward with Carmel and Pebble Beach real estate both increasing in sales activity. Carmel Highlands real estate stayed about level with August, and Carmel Valley real estate more than doubled it’s production from the previous month. This year has really been one for the books. 2011 was marked by stubborn sellers, rigid buyers and 6 month escrows that loved to fall out right before closing (my favorite!!). 2012 on the other hand, has seen buyers and sellers meeting in the middle, and of course inventory dropping sharply as a direct result. Banks have become somewhat streamlined in their approval process of foreclosures (and even short sales!), and with different tax breaks expiring, and our Presidential election coming up in a month, buyers are rushing to find that perfect home in whats left of a buyer’s market. All these factors are contributing to the beginning of a strong fourth quarter. I have enjoyed watching homes sell in certain areas where comparable homes sometimes sold only at the beginning of the year for 3% and 4% less! I am hoping that this trend continues as our market makes some strong corrections.

Pebble Beach real estate upped the ante a little last month with 10 closed home sales ranging from $677K to $3.45M. There were two closed land sales at $325K and $750K. 11 total new home sales went under contract from a list price of $399K to $1.995M, and another home at $15M- 3296 17 Mile Drive, which sits on 2.75 grassy, oceanfront acres just to the North of the Lodge. There was a notable new land sale at the Cypress Point Gold Club for $4.95M, on almost 2 acres with golf course and water views.

Carmel Highlands real estate saw no closed transactions, but 4 new homes went into escrow at $995K, $1.199M, $1.25M and $5.95M right on the water. 3 of the 4 had an ocean view. There was also one new ocean view lot sale at $699K.

Carmel real estate saw an increase of both closed escrows and new home sales. There were 27 closed home sales ranging from $335K for a 1 bed condo on Mission St, to $2.8M for a brand new 3,400 sq ft spec home on 4th & Casanova. 6 of the closed transactions were in the Golden Rectangle at $1.1M, $1.15M, $1.175M, $1.25M, $2.15M and $2.3M. There were 22 total new home sales, from $529K to $2.35M, and one at $5.595M at 26387 Isabella on Carmel Point, actually fronting on Scenic Drive, with street access on Isabella. There was also one new lot sale at $995K in the Hatton Fields area of Carmel near the top of ocean, and no closed land sales. Carmel-by-the-Sea real estate continues to be a strong frontrunner.

Carmel Valley real estate hit an end of summer home run, doubling activity with 16 closed home sales from $320K to $1.45M, and 19 new home sales, 7 of which were in the upper end of the market from $1.1M to $4.25M.

Looking like good things on the horizon for our beautiful area. The Carmel Arts and Film Festival kicks off tonight at the Sunset Center, following the Blue Ocean Film Festival, which 2 weeks ago raised awareness of our ocean’s ecosystems. The action never ends! Hope to see you all there.

Please Note: While delighted to respond to real estate related inquiries, Ryan is not particularly interested in being contacted by persons with a specific interest in any “celebrity” affiliations.
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