High end houses

I was out of the office much of the day today showing houses and it seems to me that there are still a lot of sellers who don’t understand what has happened to prices. They really should get out with their agent and look at houses priced below theirs. If the agent is careful in her selection, her seller will see better houses than his, for far less money, and even those aren’t selling.

I can’t help you with market conditions but I guarantee you that if you’re priced at $6.9 million and there is a better house – better design, better location, better grounds, asking $5.4, that owner’s will sell long before yours does.

The most egregious example of this is a new spec house that came on for $14 million when those agents who saw it thought $7.5 was its top price. Two years later, the builder still has it listed for $12 million which may be testimony to his deep pockets but not to his common sense. What I thought might be worth $7.5 in 2006 is probably worth less than $5 now. That’s got to hurt, if I’m right.

5 Comments

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5 responses to “High end houses

  1. anonymous

    Not surprised by delusional asking prices…and how many months it takes people to realize mkt has dramatically changed…..you seem to do a good job of trying to educate buyers/sellers about mkt dynamics…unfortunately, most parties tend to be economically irrational and rather emotional in terms of pricing (and time value of money)

    Allegedly more sophisticated financiers often sit in denial for 12-24mos during any major inflection point….recall how long it took SiliconValley VCs to realize that their more absurd, unprofitable Internet start-ups were worthless post TechBubbleBurst…..and many allegedly sophisticated financiers in Fall07 had no idea how illiquid and hard-to-value were their various mortgage securities holdings, which to some extent reflect severe declines in housing prices which many clearly failed to predict

  2. Limestoner

    The suspense!!! What’s the addy?!?!

  3. christopherfountain

    I was just about to tell you when I was interrupted just now by a call from an agent whose clients are upset over something I wrote about their house on Laddin’s Rock Road (I remember writing something about the place but I don’t remember what – something not particularly positive, I’d guess). So how about I give you a clue, instead: it’s way, way out of town and I think it’s for the birds. Or near them, anyway.

  4. Peg

    Quite wise advice, Christopher – and something I’ve done more than once with sellers who couldn’t seem to get their asking price in realistic territory. Unfortunately, more than once, I’ve had sellers who, after looking at a number of homes nicer than their own, yet priced below where theirs is, will proclaim: “Gee, perhaps we should ask a little more!”

    Whoever said “love is blind” was on to something.

  5. kidding really?

    Great advice Chris! As a current buyer I am patiently waiting for 5 houses I like to come down to realistic prices. I am not in a hurry since the sellers are not lowering enough. I wouldn’t put me in the “pent up” demand category of other buyers (as Nancy Healy mentioned in Greenwich paper) as I see value at one price and sellers see it at another. Back at the highs, I estimated prices across the US were 16 years ahead of themselves based on a valuation metric study I developed but Greenwich was 8 years ahead of itself.