Not sure how valuable or invaluable this chart is, but as someone who follows La Jolla closely, I’m not the least bit surprised La Jolla tops the chart. Here a couple reasons why,
1) There are very few REOs that go out at a low price then get bid up.
2) Because houses are so different in most parts of La Jolla, comps become very difficult. Judging the market value of a house in La Jolla is much harder and much more subjective than other areas. This has become even more difficult as the number of sales has dropped off. (there are even fewer comps available because there are fewer recent sales)
3) There is a very large (and growing) inventory in La Jolla, unlike other areas where inventory has stabilized or even decreased. This means that sellers, when they get an offer, any offer, are more likely to think hard about their chances of getting another offer. (currently 264 SFR’s in 92037 with average monthly sales in the mid to high teens. That would be about 15 months of inventory)
4) In La Jolla, probably most the issues that SD Realtor mentions probably don’t apply. Just as there aren’t that many REOs, there aren’t many Short Sales, Probably most appraise for sale price, or the buyer is bringing enough cash that the loan (if there is one) will still go through. If there are credits for repairs they probably aren’t much as a percentage of purchase price. I guess we still don’t know with value range whether they took the top price or the bottom, but as long as they were consistent, it’s not that important.
But I do agree with SD Realtor that this chart has no value if I interpret it as telling me that the average house in La Jolla is worth 10% less than asking price. (Or that if I get 10% off I got a good deal) To value a house, other data points are far more important.
But maybe there is value in that it tells me that it is not unreasonable to make low ball offers, even in La Jolla. And that is a big change. Three or four years ago, the suggestion that you could get a deal done in La Jolla for 10% off asking price would have brought laughter and derision. However, now that doesn’t seem outrageous but, well just plain average.
