The Story of Pitcairn Drive, or the Necessity of Price Reductions

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The home at 1854 Pitcairn Drive in Costa Mesa’s Mesa Verde neighborhood tells a story, and the story has a moral. In addition, the story of 1854 Pitcairn Drive reveals a trick that homeowners use to outwit the buyers. This is just one example of many in Orange County.

As shown below, this house was on the market last year with a price tag of $1,075,000. In August 2007, a $40,000 price reduction brought the asking price down to $1,035,000. Still no buyers. By October 2007, more price reductions brought the asking price down to $1,020,000—a $15,000 drop. Last month (January 2008) this home went on the market as a new listing for $875,000. In all, a $200,000 drop.
Photo Courtesy Liz Henry

Here is the trick part of the story: Homeowners are taking their houses off the market and then relisting them with different MSL numbers. Many homeowners are using this trick to portray their home as a new listing and therefore make them more visible on Realtors’ lists. It also conceals the multiple price reductions.

Now here is the moral part of the story; I don’t know if these homeowners will sell this house at the current asking price of $875,000. Maybe yes, and maybe no. But what is likely is that if they had asked for $875,000 back in August 2007, this house would be sold. I don’t mean to be too judgmental with these homeowners. Human nature is at work, and we all tend to want the most for what we have. But in addition to human nature, there is reality.

The reality is that if these homeowners had been willing to lower their price to their current level of $875,000, this house would most likely be sold, and the owners would have avoided a lot of stress. Now, the asking price of $875,000 may or may not sell the house. $875,000 probably looked like a lot better deal to most homebuyers in August 2007 than it does today.

Whether or not prices will continue to drop is a post for another time. But what is clear is that they certainly aren’t going back up any time soon. As stated by Redfin’s CEO Glenn Kelman in a Jon Lansner Insider Q & A article, hopeful buyers are making offers, but the deal usually falls through because the owner rejects the offer (“Insider Q&A hears 80% of O.C. home offers rejected“).

Following is the story of 1854 Pitcairn in number form:

1854 Pitcairn Drive, Costa Mesa 92626
1963 detached, single-level house; 4 beds/3 baths; 2600 SF; 7500 SF lot
On August 30, 2007: The list price of $1,075,000 was reduced to $1,035,000 ( update to MLS listing # S490269).
On October 3, 2007: Asking price was $1,020,000 (new listing).
On January, 31, 2008: Asking price is $875,000 (new listing).
Total Reduction: $200,000

Sales History
Sold on August 23, 2004 for $850,000
Sold on August 31, 1995 for $270,000

  • Carol

    Very smart post!

  • http://orangecounty.redfin.com/blog/author/sylvia.walker Sylvia Walker

    Carol,

    Thanks for the comment. I appreciate the feedback.