By Eric Castongia, Zephyr Real Estate
While other areas are continuing to see significant reductions in value, West Portal/Inner Parkside has remained stable. There are still properties selling quickly with multiple offers over asking (premium properties), while others are stagnant with price reduction after price reduction (read opportunity). Despite over asking and multiple offers, we did not see an overall increase of property values for 2011. In the end, it was more of a dot-com era strategy, to price low and generate interest in a property. It’s important to note that this only happened successfully for properties that hit mainstream buyer criteria. Here’s what happened behind the scenes:
- The total number of sales for 2011 was 51, down from 2010’s 58. Total annual sales since I started recording in 2004, have generally ranged between 52 and 60 each year; this did not occur in 2007 (37) and 2009 (38); these were the years with the largest adjustments in value.
- At the close of the fourth quarter of 2011, we had three active, five pending (not yet closed), 15 sold (closed). Of the 15 sold properties, seven received multiple offers and six of them sold over their asking price. The amount of over bids ranged from as little as $1,000 to as much as $105,000. The properties were well presented and psychologically priced for the market, which created a call to action on the part of the buyer.
- Time is your enemy when it comes to pricing. Seven (47%) of the fourth quarter’s 15 sold properties had price reductions, then received offers. Of those, four sold under asking, one sold at the new asking price and four sold for less than the newly reduced price. Five of these seven sold properties took more than 60 days to close from marketing to closing. If it doesn’t sell within the first several weeks, sellers need to expect a price reduction; buyers certainly are. The largest reduction below a property’s asking price (this after a reduction in the original asking price) in the last quarter was $72,500 (nine percent below).
- Only one of the 15 sold properties was a short sale or foreclosure. For the year, there were six short sales and foreclosures that closed escrow (12%). For perspective, In 2010, there were three short sales and foreclosures that closed (five percent). With the California average of one in 211 households heading into foreclosure, we’re still way below average.
- In the last quarter, there were four ‘failed to sell’ (withdrawn) listings. When a listing fails to sell, it’s generally a result of overpricing for the market and property condition. In 2010, we had a total of 11 ‘failed to sell’ listings; in 2011, we had 8. Note that half of the whole year’s supply was in the last quarter. It seems a few owners were trying to sell before the end of the year and testing the market.
- Property values in the neighborhood have stayed consistent throughout 2011 (and for the last few years), fluctuating within five percent or so. The value on less desirable properties, i.e. those with flaws, have come down more in relative value. This could include: not having three bedrooms on the same floor, not being remodeled, or not having a back yard.
- Interest rates have remained historically low, with a few adjustments us and down throughout the year. The Fed has announced that they expect to continue low interest rates throughout 2012. As I’ve said before, the buyers with financing in the marketplace are gold. They are waiting for the right property and remain selective, so sellers still need to consider this a buyers’ market.
Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.