Increasing home price

[FutureSDguy]

I find the price change pattern on this property rather odd. Any wild speculations as to why?

MLS: 061044925
Address: 3525 SIMSBURY CT, Carlsbad, CA 92010
On market: 112 days

ZipRealty Price Track:

Price Reduced: 06/23/06 — $677,000 to $599,000
Price Increased: 06/27/06 — $599,000 to $659,000
Price Increased: 07/07/06 — $659,000 to $689,000

[powayseller]

One of my friends noticed that some properties she is following, have increased in price too. Neither of us could explain it.

Perhaps it’s a strategys. The sellers think raising the price makes their property more desireable, as in, “Come buy it today before it goes up even more!”

[hs]

Yes. I’ve noticed the same thing. One of the realtors sends me a daily listing. A while ago, you would see the price trend is down, but recently the new listed houses price comes out higher. I wonder why? Is this a game or a new strategy the realtors are playing?

[Bugs]

I’m a lot more interested in closed sales than in individual listings. At this point, a listing represents somebody’s dream. Some of those dreams will come true but most of them won’t.

[Chrispy]

Maybe they plan to reduce the price later – so they can say, “Price reduced by $75K!” and make it seem like a screaming deal.

[speedingpullet]

I think it was someone on Piggingtons who provided a very plausible explanation. The seller has been battling with thier agent all summer about the price, and eventually the agent gives in and says ‘OK, if you want $x for this place, lets put it on the market at $x and see what happens’…hence they increase the price to what the seller wants, and, well we can all see the results.

Interesting to note that – of the places I’m tracking in L.A – none have had a price increase since before Labor Day.

Almost as if the behind-the-scenes conversation went …seller: “its not the price I want”….agent:”OK, Labor Day Weekend is the last real selling time of the year (and I can’t handle dealing with your unrealistic expectations any more), so price it at what you think is fair (and we can always reduce it again as Fall turns to Winter..).
Or words to that effect, anyway.

I mean no offense to the sellers here – I’m sure the canny Piggintons have already sold, are renting, or have no airy-fairy expectations of what their property will net in the coming few years.

Still, my own personal perennial “Poster Child of the Great 2006 Housing Bubble” is hanging on in there, with only 32 DOM. Many of you have seen it before…

http://www.realtor.com/Prop/1066446865

Recap: 900 sq ft, lot 1900 sq ft, built 1902, on a busy intersection in West Hollywood.
Original Listing Price on 8/15/06 – $949K
Price Increased on 8/18/06 – $999K

I’d like to nominate this one for the Perrier ‘Comedian of the Year’ Award…;-)

Also, I’d love to have been a fly on the wall during conversations between the seller and thier agent….what on earth was going through the seller’s head when they decided that place was worth a million bucks, and what the seller’s agent was smoking to allow them to do it.
it may be West Hollywood, but to the best of my knowledge, this house is not made of gold bricks.

[sdcellar]

I can’t explain that particular listing, but I have seen houses that have a pretty big spread in their “value range” listing (ha!) where they adjust the lower end up.

For example, a house might be listed between $849-$999 and they’ll change it to $899-$999. I suspect they may be getting offers at or below the bottom end of the range and since they’re not serious about it (i.e. they really want $999), they’ll just raise the lower end.

Unfortunately, ziprealty doesn’t keep track of changes to the whole value range, just the lower end. As a matter of fact, I’ve seen people raise and lower the upper part of the range and zip doesn’t track this at all.

On the Simsbury listing, it could be that they were just never serious about the $599 price. It was pretty short lived.

[lindismith]

It could also be that sellers have heard “the median continues to rise” and so in their heads, without checking any numbers, they actually think they can get what they believe their house is worth.

We kept hearing that all summer, so if they’ve missed that the median doesn’t acutally mean anything, they still think it’s a hot market.

[bubba99]

Or it could be a tried and true retail tactic of rasing the price when customers begin to expect a big discount. The discounted higher price is what the retailer really wanted in the first place.

Just a ploy to manage buyers expectations.

[FutureSDguy]

SDC, i’ve been meaning to ask this for a while. What’s up with the low-high range? How does the seller view the meaning of the low end and the high end? Can’t they just say “will take offers from x on up to infinity?”

[FutureSDguy]

remove duplicate

[FutureSDguy]

RE marketing sure has gotten strange. I guess all this worked when there was a buying frenzy. I’ve been interpreting their low end as my high end (i.e. i’ll lowball somewhere and then meet somewhere in between.). Their high is is some made-up number and the range is also equally meaningless.

In fact, if my interpretion is what really happens, the short sale predictions in http://sandiegomarketmonitor.blogspot.com is significantly underestimating the capital loss. From what I’ve seen, it sets the hypothetical sale price as the midpoint between their low and their high.

[JES]

Yes, now that huge discounts are the norm, properties that have been sitting all summer have a ‘perceived’ incentive in raising the price so that the discount can be taken off a higehr number. Also, if potential buyers ask about it they can just say, “Well, based on recent sales and our research we realized we were actually priced really low. The median in this area continues to do well you know.” There may be cases where new solds on a street come in higher than what sellers of an active home expect and they in turn raise their asking price. EG: You are asking 900k, but the neighbor just closed at 1 Mil. You now think yours is worth that and you reprice higher. Or it could all be a trick to create the illusion that prices are still rising fast in some areas.

[Chrispy]

Or, maybe they just got a black-bordered mortgage reset notice in the mail and thought, “Jeez, it may take until spring to sell this sucker, and I’m going to owe so much more then so I’d better raise my price now.”

Is anyone else getting sick of the way people that the price of a house should be equal to, or greater than, what they owe on it…. as if getting them out from under should matter as much to the buyer as it does to the seller?

[SD Realtor]

Speeding Bullet you called it 100% correctly. Whenever you see bizarre price fluctations, 99% of the time it is due to the seller asking the Realtor to adjust.

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