UPDATE:
I wanted to provide an update on this category. Without a doubt, I get more questions regarding this category than on any of the others. Please click on “Suprising Numbers for San Carlos After Mortgage Crunch” above to review the last entry in this category which was September 10th.
The question on everyone’s mind is, Has San Carlos continued to buck the trend and still do well with its housing inventory. The short answer is a resounding “Yes”. I wanted to wait six weeks before supplementing this category so that we could get a good read on the new data. All of the numbers contained below were taken from sales which closed after September 10th (the date of the first post), through today, Monday, October 15th.
The Basics
Number of San Carlos homes to sell between September 11th and October 15th: 24
Number of Homes to sell over the asking price: 14
Number of Homes to sell at the asking price: 1
Number of Homes to sell under the list price:9
Dig a Little Deeper
In compiling the numbers below, we took out the high and low price for each category:
For the homes that sold over the asking price, what was the average amount of the over bid?: $57,875
For the homes that sold under the asking price, what was the average sales price compared to the list price?: Of the homes that sold under the list price the average sales price was 97.4% of the list price. In other words, of the homes which could not sell at the list price, the average sales price was within 2.6 percent of that particular list price.
Summary
Overall, extremely impressive numbers. Also, consider that our inventory has actually dropped down slightly to 53 active single family residences. When compiling the data for all 24 homes sold during the September 11th to October 15th time frame, the average selling price was 1.071% of the list price. In other words, when averaging all 24 home sales, the average home sold during this time period sold at about 7% over the list price.
5 Comments
Would you have any specific comments on the houses that went over and under the asking price by a significant amount? Were the prices reasonable to begin with?
Thank you for the information. This town never ceases to amaze me. We actually stumbled onto San Carlos by sheer luck about 14 years ago. We bought our home on Cedar and have absolutely loved living here. It appears, from the numbers, that everyone else holds our town in high regard as well.
Dear Visitor to the Area,
That is an excellent question. Its also the reason we threw out the high and low when computing the averages. 140 Mesa Verde Way was listed at $1,590,000 and sold for $1,935,000. On the flip side, 1309 Elm was listed at $1,095,000 and ended up selling for $1,000,000. Both beg the question of whether the list price was set too high or low to begin with.
Setting a price is not an exact science, however, a good realtor should be able to get very close to the actual market value, usually within 2%. Certainly, when you start to have sales prices that are double digit percentages different than the list price, the assumption is that the list price was not at market value to begin with. However, it is important to note that these were the only two properties of the most recent 24 to sell, that fit this description.
Usually, when a list price is too low, it is the result of one or two problems: (1) the listing agent was attempting to solicit multiple bids in order to drive up interest and the price; or (2) the agent simply did not do their market evaluation correctly. While setting the price lower than market value and obtaining massive overbids may seem like a great idea, it is actually quite risky on several fronts. This week’s podcast will touch on some of these risks.
Usually, when a list price is too high it is the result of one or two problems (1) The seller believes their home is worth far more than it actually is worth and is mandating the higher price against the agent’s advice; or (2) the agent set the expectations for the value of the home too high when trying to obtain the listing from the seller. As I have said numerous times on this site: Price your San Carlos home fairly and it will sell efficiently. Get greedy by 3% or more, and watch it sit. Ultimately, you will open the door to massive underbids. Judging by some of the homes on the San Carlos market, we have agents and sellers that still think this is spring of 2004…
Good answer Bob.
I do remember the 1309 Elm place asking for $1.275M way back in April. Probably a big pricing mistake.
On that note, it appears your calculations are based on the final list price just prior to the sale, not the initial asking price which could have been 5+% higher.
Great memory! And I completely agree with your analysis….are you sure you are only visiting?
Yes, Elm was originally listed with Intero for very close to 1.3 million which was grossly overpriced and a major marketing error. I think if they had originally priced it at $1,050,000, they would have gotten it…and maybe a little more.
Also, you are correct, I have done the calculations based on the highest list price that is available on the MLS. Most of the time, if there was a high list price, it is available and I used it in the computations. However, when a property re-lists at a much lower price or there is a change in brokerages (as was the case with Elm when they switched from Intero to Help-U-Sell), the property will come back on the market at a new price and wipe away the original list price. For our calculations, and my recall of the 24 sold homes that we used in our calculations, is that homes like Elm are far and few between. Certainly, the homes going over the list price were never adjusted, given their DOM. So I am not sure the error is +/- 5%, but it may be 2 or 3%.
I would appreciate your insight on any of the other categories, if you have the time.
Thanks again,
Bob