I’ve been seeing a spike in price increases lately, with a lot of “transparent pricing” agent alerts soaring into my email inbox. There are a few reasons behind this recent activity.
We’ve had a robust real estate Spring to date, with lots of massive overbidding happening. Sellers tend to lean heavily on the high-flying comps when determining their property value, giving the most weight to the highest, craziest sale outcomes. If a seller is lucky, one or two buyers will go all out for the property and will pay well above what everyone else offers.
This scenario unfortunately doesn’t happen in every instance. Sellers attempting to replicate their neighbor’s enormous overbid outcome may hit a wall, and aren’t willing to accept anywhere near their low list price. For example, not every house listed for $2,895,000 in Noe Valley will land that $3.8M overbid. And sellers have a couple options if the overbidding doesn’t transpire.
The first option is to accept market value for the property. Another is to increase the price to what the seller is seeking with the hope that a buyer will come along who considers that property to be just as desirable as the one a few blocks away that sold for the target price. Marketing shifts to touting “transparent pricing,” and away we go.
Sellers in this case tend to be in the “I’ll sell if I can get that price” camp, and may or may not end up coming to terms with market value. The advantage for the buyer is that he or she can simply pay the transparent price and not have to compete in a multiple-offer situation. Everyone cuts to the chase, in other words.
Here are a few transparently priced homes out there now:
733 Sanchez | Eureka Valley
3BR/3BA, 2066 sq ft
Initial List Price: $2,995,000
Increased To: $3,695,000
Selling Points: Downtown and Bay views; up the hill from Dolores Park; nice primary suite with vaulted ceilings; extra-wide lot.
(Photos above courtesy Corcoran Global Living)
738 15th Street | Central Richmond
4BR/4.5BA, 3106 sq ft
Initial List Price: $3,495,00
Increased To: $3,895,000
Selling Points: Three bedrooms including primary suite and a rear sunroom all on the upper level; large yard; newly renovated
(Photo courtesy HomeSmart Bay Area)
307 Chattanooga | Noe Valley
2BR/2BA, 1380 sq ft condo
Initial List Price: $1,695,000
Increased To: $1,900,000
Selling Points: Good floor plan with bedrooms at rear; remodeled kitchen; great neighborhood location near 24th Street corridor and BART; nice shared garden
77 Dow #501 | Yerba Buena
1BR/1BA, 1020 sq ft condo
Initial List Price: $799,000
Increased To: $825,000
Selling Points: Loft with nice natural light; deeded parking; excellent location near Financial District, Embarcadero
(Photo courtesy Mosaik Real Estate)