Why are all of the homes for sale in my subdivision priced so far above comps?
I just purchased a home in a 1950s subdivision where the houses are pretty similar so the sales prices usually don’t vary much. My husband is an agent and we’ve been watching the sales activity since 10/01 out of curiosity.
There are 12 properties that are or recently have been on the market: 4 sales, (2) @ 141K, (1) @ 140K, and (1) @ 110K (apparently trashed). A listing at 172K expired; another @ 142K is temporarily off the market for repairs.
The remaining 6 properties range from $149K to $169K. DOM ranges from 200-30, and there have not been any significant price drops in the last 2 months.
My purchase was the $140K. Next door is listed at 149K (since AUGUST). I wouldn’t say it’s vastly different from ours, except that our kitchen has been updated and this was last done c. 1975. Right around the corner, a house with the original kitchen and 1950s bathrooms went on the market a month ago for $154K!
What are these agents thinking?
My husband and I discussed this last night, but I’m curious what others think.
All of the recent sales happened close enough together that none of us had the others’ sales to use as comps. It’s purely accidental that our sales prices were so similar.
Greed or the people in that sub division all took out huge loans to purchase or refinance.
As I’m sure your husband explained, everyone has a budget situation that drives prices. However, it unlikely that a house priced that far above what has sold in the area will sell without having some significant updates.
Most of the time the seller is owing more than what the houses are worth. They need to list it just to break even or get a few extra dollars to put down on something else. Several people are finding there way to foreclose, because of the adjustable rate they are in and have no choice but to try to sell there homes.
people just trying to get the most they can – they probably won’t sell for those prices so maybe they priced them higher to give themselves more downward negotiating room, so it will actually sell at market price – you even said one expired at a very high price – if it was listed that high for 6 months and no one bid, then you know it was overpriced. I bought my house in Feb 06 for 17k (10%) below original asking price and even now, it’s probably worth less because of the sub prime problems