Houses deluged with offers way above their asking price are common stories nowadays. But there remain a significant minority of wallflowers. They could be challenged in some way — awkward layout, unpermitted work, problematic location — or there could be an issue with the pricing.
Here’s a tale of two recent for-sale houses, located side by side in Oakland’s popular Rockridge neighborhood — an easy stroll to BART, coffee, lots of chi-chi shops – that underscore how real estate remains as much an art as a science.
One triggered a bidding war and sold last month for $146,000 over asking, a 20% premium. Right next door, the other house sat..and sat…and sat, and this month was withdrawn from the market, having failed to win a satisfactory bid.
The one that sold, a two-bedroom, one-bath, pictured at top, listed at $719,000. “It had so much of the original Craftsman charm that pulls on a lot of heartstrings,” said listing agent Scott Ward of Lawton Associates. It also had an updated kitchen and bathroom.
But at 1,306 square feet with a lot that was only 2,900 square feet (about a quarter smaller than usual), it was hardly spacious. “I was able to control the message, that yes, we’re a little small on yard space but it’s very efficient; you can still be outside, there’s great indoor-outdoor flow off the kitchen,” Ward said.
It helped that the owners were designers and had done Dwell-magazine style “hardscaping” of the yard to make it super functional. “The way they lived in that space was very efficient and utilitarian,” Ward said. “It was a good house in great shape and showed very well.”
As for the $719,000 asking price, Ward says he’s not a fan of opting for unrealistically low asking prices just to inspire a buyer feeding frenzy.
“I try not to be too hard-core with listing way under (market value); that can come back and bite you,” he said. Still, he doesn’t like to go unrealistically high either. “I wanted to make sure people got their foot through the door because then you can create a little more excitement. I always talk (to clients) about (in the) worst case would you take around that list price.”
Ira Serkes of Pacific Union/Christie’s International weighed in on the question of pricing strategy. “If buyers don’t perceive a bargain, all the marketing in the world won’t do it,” he said. “You have to price at the sweet spot to get people interested. Once they’re interested, they’re more than happy to bid against one another. There’s a kind of social validation — if others are bidding, people perceive value and feel more comfortable.”
Immediately next door to the “popular house” was a larger classic brown-shingle house that also had character and charm (see below). Property records show it as a three-bedroom, two-bathroom totaling 1,744 square feet. Its lot is also small, at 2,680 square feet. It listed for $910,000 — almost $200,000 more than the two-bedroom Craftsman next door. If it received any offers, they were not acceptable to the seller.
The house’s listing agent declined to comment. But other agents said the bigger house’s high list price and the fact that one of the three bedrooms was unorthodox may have hurt it.
“When you price really high, buyers get scared; they think it’s out of their range so they don’t even bother,” said Cheryl Berger of Better Homes Gardens/Mason-McDuffie Real Estate. She is listing a nearby Rockridge house for $749,000, which she calls “a realistic price.” At three bedrooms, 2.5 bathrooms and 1,500 square feet, it’s roughly comparable to the $910,000 list price house, she said.
Another factor may have been that the market is starting to shift, with more homes being offered for sale.
“We’re seeing an increase in inventory in Rockridge,” Berger said. “Buyers who hang in there are having more of a selection, especially at the higher price points.”
Redfin agent Mark Biggins had some thoughts on the role pricing strategy may have played.
“When a property is priced below the comparables, such as (the house that sold), it attracts multiple offers and often times sells for well above what the market supports,” he said. “This of course is what drives a rising market. When a property is priced at the top end of the range of value, or above, it does not garner as much interest and ends up sitting. The longer it sits the more stagnant it gets and will end up selling for less than what the comps indicate as market value or being pulled from the market.”
That “rising market” continues to be the story of the day in the Bay Area, as the region’s median price zoomed to $555,000. For a detailed look at price and sales-volume trends in all nine counties — and an update on the tight inventory situation – click here.
Carolyn Said is a San Francisco Chronicle staff writer. For news and insights on Bay Area real estate, follow her on Twitter: @csaid