Over-Pricing
How Do You Price a Rembrandt?
I have no idea. Fortunately, I’m in real estate not art, so it doesn’t matter. But pricing real estate is something all of us in this industry are supposed to have some grasp of, so I’m always curious when I come across a wildly over-priced home (wildly under-priced homes are rare, unfortunately, and the problem is instantly corrected via a bidding war). What went wrong? Was the agent so pressured by his customer that he went along with a crazy price just to get the listing? Was he dropped, repeatedly and hard, on his head?
All of which comes to mind because I saw a house this week that was somewhere between $11,000,000 and $14,000,000 over-priced, at least in my opinion and that of several other agents (I’m at the harshest end of that estimation, by the way). A large lot, but not large enough to throw off a separate lot, and a rather unimpressive drive leading to an interesting experiment in architectural design: who knew, back when the house was on the drawing board, that twin steel fire doors as an entranceway would not be attractive? I wandered through the rather small (four bedrooms, if you make the servant give up hers) home, waiting to come around a bend and discover the rationale for the pricing. I was sure that there was a third floor, perhaps, or even a secret passageway leading to some special chamber in which all would be revealed but there was . . . nothing. What there is of the house is beautifully built but there just isn’t enough of it to justify this price. Outside, although there is a very nice pool, much of the remaining acreage is devoted to a pond that needs mowing. And you can wave to your neighbors on either side, which, while friendly, is not necessarily an attribute many buyers are interested in at this price range. A curious price, but one that will become less curious, I predict, over the next eighteen months.
Weekly ActivityAside from the light bulbs blowing out, not all that much went on last week. There are still bidding wars breaking out: Ken Yorke’s (Shore & Country) listing at 50 Hillside Road, for instance, asking $1,500,000, drew several bidders. And homes are selling. 9 Lake Drive in Riverside (Jackie Hammock), asking $1,449,000, went to contract, as did Linda Hodge’s listing at 40 Walsh Lane, asking $5,600,000 (new construction), and a bunch of others. In fact, it has been a surprisingly busy summer, with a lot of active buyers who seemed to shake off their spring time doubts and pulled out their checkbooks. If you house didn’t sell this summer, it was probably not because of summer doldrums but, rather, because it is over-priced. It may be true that some houses are so unique that sellers must wait for that one buyer in a million to appear, but I know of no such homes presently for sale in town.
Okay, I Take That Back
Alice Duff’s listing at 1 Brookside Park is a really, really nice contemporary on an acre plus of land with a rushing stream, nice lawn, privacy and close-to-town location. It does not strike me as wildly over-priced at $1.785, yet it has been on the market since June. If there is an example of a perfect, unique home waiting for the right buyer, this is it.
Rabbit Warrens
Real estate agents like to speak about “flow” meaning, I suppose, the ease with which one room leads to another. It is a desirable feature, usually, but sometimes a home has no flow to speak of and still pulls off the remarkable trick of being a great house to live in. Two such homes that come to mind are Sally O’Brien’s listing at 230 Bedford Road and Ann Benedict’s (Country Living) at 340 Old Church Road, $5,900,000 and $3,750,000, respectively. Both homes offer all sorts of unexpected passageways and rooms to hide in (or to hide from teenagers) and feel just right. Neither has a strictly logical floor plan (although Sally spread breadcrumb trails for her listing’s open house she failed to conduct a head count: the next buyer should insist that the house be delivered broom-clean and free of wandering agents) yet they work just fine. The Old Church Road property is just across from Country Day so that the au pair can escort the next generation of investment bankers to school and then get back to her real duties like window washing. Bedford Road is further out, naturally, but comes with lots of land and a beautiful pond. I like them both.
I have no idea. Fortunately, I’m in real estate not art, so it doesn’t matter. But pricing real estate is something all of us in this industry are supposed to have some grasp of, so I’m always curious when I come across a wildly over-priced home (wildly under-priced homes are rare, unfortunately, and the problem is instantly corrected via a bidding war). What went wrong? Was the agent so pressured by his customer that he went along with a crazy price just to get the listing? Was he dropped, repeatedly and hard, on his head?
All of which comes to mind because I saw a house this week that was somewhere between $11,000,000 and $14,000,000 over-priced, at least in my opinion and that of several other agents (I’m at the harshest end of that estimation, by the way). A large lot, but not large enough to throw off a separate lot, and a rather unimpressive drive leading to an interesting experiment in architectural design: who knew, back when the house was on the drawing board, that twin steel fire doors as an entranceway would not be attractive? I wandered through the rather small (four bedrooms, if you make the servant give up hers) home, waiting to come around a bend and discover the rationale for the pricing. I was sure that there was a third floor, perhaps, or even a secret passageway leading to some special chamber in which all would be revealed but there was . . . nothing. What there is of the house is beautifully built but there just isn’t enough of it to justify this price. Outside, although there is a very nice pool, much of the remaining acreage is devoted to a pond that needs mowing. And you can wave to your neighbors on either side, which, while friendly, is not necessarily an attribute many buyers are interested in at this price range. A curious price, but one that will become less curious, I predict, over the next eighteen months.
Weekly ActivityAside from the light bulbs blowing out, not all that much went on last week. There are still bidding wars breaking out: Ken Yorke’s (Shore & Country) listing at 50 Hillside Road, for instance, asking $1,500,000, drew several bidders. And homes are selling. 9 Lake Drive in Riverside (Jackie Hammock), asking $1,449,000, went to contract, as did Linda Hodge’s listing at 40 Walsh Lane, asking $5,600,000 (new construction), and a bunch of others. In fact, it has been a surprisingly busy summer, with a lot of active buyers who seemed to shake off their spring time doubts and pulled out their checkbooks. If you house didn’t sell this summer, it was probably not because of summer doldrums but, rather, because it is over-priced. It may be true that some houses are so unique that sellers must wait for that one buyer in a million to appear, but I know of no such homes presently for sale in town.
Okay, I Take That Back
Alice Duff’s listing at 1 Brookside Park is a really, really nice contemporary on an acre plus of land with a rushing stream, nice lawn, privacy and close-to-town location. It does not strike me as wildly over-priced at $1.785, yet it has been on the market since June. If there is an example of a perfect, unique home waiting for the right buyer, this is it.
Rabbit Warrens
Real estate agents like to speak about “flow” meaning, I suppose, the ease with which one room leads to another. It is a desirable feature, usually, but sometimes a home has no flow to speak of and still pulls off the remarkable trick of being a great house to live in. Two such homes that come to mind are Sally O’Brien’s listing at 230 Bedford Road and Ann Benedict’s (Country Living) at 340 Old Church Road, $5,900,000 and $3,750,000, respectively. Both homes offer all sorts of unexpected passageways and rooms to hide in (or to hide from teenagers) and feel just right. Neither has a strictly logical floor plan (although Sally spread breadcrumb trails for her listing’s open house she failed to conduct a head count: the next buyer should insist that the house be delivered broom-clean and free of wandering agents) yet they work just fine. The Old Church Road property is just across from Country Day so that the au pair can escort the next generation of investment bankers to school and then get back to her real duties like window washing. Bedford Road is further out, naturally, but comes with lots of land and a beautiful pond. I like them both.
posted by Chris Fountain at 10:22 AM
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