The house that I blogged about last week, that was priced 30% lower than other houses in the area, sold in its first week. We really loved the house and we were going to put an offer in, but someone realized the same thing we did: it was a good deal.
We’re not totally depressed about it because a) we are 99% convinced that the price of homes in Los Angeles will keep going down over the next 12-24 months and b) now that someone has been rewarded for pricing a house at ~$740 a square foot the crazy folks showing similar houses at $900 to $1,150 a square foot might get motivated to lower their price.
Our second favorite house, which has been on the market for almost a year, was just pulled off the market by the owner and will be a “pocket listing” by the broker. In other words, the person doesn’t want to budge on the price and is getting tired of showing the house. This is not a good thing for us because it lowers the number of homes on the market, and the inventory level is what is getting people like the “$740 a square foot” house to price their homes aggressively.
However, the person who took their home off the market is an anomaly. The have kids starting the school year, and they don’t have to move–they want to move so they can cash in on the appreciation of their home’s price. Everyone else seems to be keeping their homes on the market and moving down their prices
Real estate is a horribly inefficient market and many of the brokers seem to be playing games. Folks are relisting homes all over the place to “reset” the days listed number, and people are not updating their MLS listing with the market down prices. We’ve been to homes months ago that were shown at 10-25% less than their MLS pages *still* say they are.
I think realtors keep the listing old because they don’t want to shock the market with all the price drops. However, I can tell you firsthand that almost every market down home I’ve been to is still listed at the original price on the various services. This reminds me of VCs not writing down the value of their investments after the dotcom bust. What a joke.
At this point my suggestion to buyers is hold the line–the sellers are on the brink of coming back down to earth and the real estate industry is going to have to come clean soon if they want to make the market fluid. At the end of the day realtors need a fluid market because they only make money if there are transactions, and right now the games being played are pissing off the buyers and keeping them on sidelines.
Other related news:
- Talk about desperate but brilliant (via thehousingbubbleblog.com): Sell me home and I’ll give you a Marerati
- The excellent Altos Research Corp blog riffs on relistings–very educational.
- I begged Curbed LA to do a price chopper feature and they did me the solid–that’s guys! (Note: Lots of comments on the post already–I hope folks start sending Curbed tips on stuff that is waaaaay market down.) This home was marketed down 33% and has been on the market 100 days. I think it’s going to get reduced again and sell.
- 360Digest does some research on which sites have the most listings. Turns our Trulia–which I love–does a good job, but Yahoo Real Estate is best.