Fewer Reductions As Home Starting Prices Come In Lower
This may be all in my imagination, but I think there are fewer price reductions around now than six months ago in my patch of Berkeley and north Oakland.
This would seem to contradict the usual state of affairs in a housing crunch where burning and slashing is the norm. My theory is that real-estate agents are advising their clients to lower their expectations on their asking prices. This has — they hope — the effect of attracting more potential buyers, reducing the chances of having to initiate reductions — which never present well — and, if things go particularly well, provoking a bidding war.
Having said all that, I have unearthed a handful of price cuts this week:
2350 West Street: 3/1 with new doors, windows and carpet and refinished hardwood floors in central Berkeley. New price: $529,000.
6343 Skyline Boulevard: “Daring” luxury home (pictured above) with curved walls, steel-framed architecture and views. Reduced from $2,200,000 to $1,999,000 after 83 days on Redfin.
Also on Skyline Boulevard at 6013: “high drama” 4/3 house (pictured right) and adjacent lot with flagstone patios and views. Cut from $2,750,000 to $$2,495,000 after 37 days on Redfin.
5607 Merriewood: 2/2 home with “huge decks”, updated kitchen and baths and “great flow for entertaining” in Montclair. New price: $699,000.
Also on Merriewood at 5739, a 4/3 “beautifully maintained” home with level entry and views. Down to $1,275,000.
257 Hillcrest Road,: 3/3+, 4,000 sq ft home with au-pair studio and views in Berkeley’s Claremont neighborhood. Reduced from $1,579,000 to $1,499,000.
3701, 38th Avenue: “Earth friendly” (whatever that means) 1/1 cottage condo with new kitchen in the Laurel neighborhood of Oakland . Price down to $299,950.
Charles said:
Isn’t this something that could be proved empirically, i.e. without appeal to one’s “sense” of the market?
For what its worth, I believe the opposite is true. I follow Berkeley, Kensington, and Piedmont and have typically noted about one or two reductions a day. (24 Highgate in Kensington this morning, btw).
Again, the data may prove me wrong, but I believe price reductions are more common than six or twelve months ago.
May 25, 2008 7:20 PM
Toady said:
2350 West St. has only been reduced $1,000, about 0.2%. Seems kind of pointless.
Is Maison Nouveau having a hard time moving listings, or what? I think the last thing they sold was 1628 Stuart last November, and that for went about 5% under. They seem to be pretty insistently overpricing their listings.
May 26, 2008 8:21 AM
TheTruthHurts said:
I agree with the empirical comment. I will say that as we approached fall (Sept-Oct) I saw more reductions through about March. The new spring crowd seems to be pricing lower (not by enough) and then not moving for awhile. There are also MANY more REOs out there creating a serious disconnect among properties. I’ve followed Fremont, Union City, hayward and not Berkeley.
May 26, 2008 9:12 AM
tracey.taylor said:
Charles: I’m sure you are right that it is possible to track price reductions. It isn’t always easy to source the data, however, as the MLS listings don’t always include reductions. You would need to set up a spreadsheet and then devote considerable time to amalgamating all the data.
The Berkeley Housing Crash site keeps an eye on reductions but the site seems to have some technical hitch at the moment. I can’t load the homepage. Kim — are you there? Do you know what the problem is?
TheTruthHurts: I agree with you about the timing. The new year saw a rash of reductions in Berkeley — often multiple ones on a single house — then, as inventory picked up, it seemed as though real-estate agents and their clients increasingly figured out more sensible pricing strategies to avoid having to make cuts.
May 26, 2008 2:09 PM
Kim said:
Hi Tracey,
Yes I’m still here and will take a look at my site.
Kim
May 27, 2008 12:28 AM
Philip Kaake said:
I find all of the above to be true. Listings are coming on the market and at lower prices and still going through price reductions, maybe fewer because they sell. Or maybe not depending on the mood of the seller. For those who track real estate through public sites you would have to manually check price reductions. As an agent I can look at the price history and see all the reductions and when they happened. If you are seriously looking for a home get a good local agent.
May 27, 2008 11:08 AM
Kim said:
Tracey,
The site should work fine and are all up to date. It’s just a Google map now. One page at http://berkeleycrash.blogspot.com/
Kim
May 27, 2008 11:26 AM
tracey.taylor said:
Kim: I’m still able problems loading your site. In fact it’s freezing my computer when I try it. You might want to investigate…
May 27, 2008 12:08 PM
Kim said:
Thanks Tracey,
Try again. It should work fine now – I hope :-/
Kim
http://berkeleycrash.blogspot.com/
May 28, 2008 3:53 PM
Kim said:
Look at this very nice price cut from today:
1730 SONOMA AVE Berkeley, CA 94707
FOR SALE:
May 8th, 2008: $1,849,000
Price reduced May 28th 2008: $1,595,000
Kim
May 28, 2008 4:05 PM