September 6, 2006
One Building, Same Floor (Plans), Two Very Different Prices
You may recall the two units we profiled in 2760 Sacramento. Unit #11 first hit the market at $795,000 (and was subsequently reduced to $755,000) while unit #9 hit the market for $769,000. According to a tipster, here’s how it played out:
#11 sat forever…they dropped the price…got 4 multiple offers…rumored to have gone back in contract for their original list price. Then the buyer got remorse so it fell out.
Simultaneously #9 - same floor plan better kitchen and some city views comes on - 24 disclosure packages go out voila $859k sales price.
Meantime #11 gets back in contract and just closed for $749k. Honestly the views weren't that great.
Our take: competitive bidding still gets the best
of people results, and views continue to command a premium. And at the very least, we’re still calling it troublesome for the buyers of unit #3 who paid $827,000 last November, don’t have parking, and are located two floors directly below #11.
First Published: September 6, 2006 11:03 AM
Comments from "Plugged In" Readers
Are both #11 and #9 the exact same size? Do they both have the same parking situation?
Posted by: Anonymous at September 6, 2006 12:29 PM
All three units (#3, #9, and #11) are the same size and general layout, and both #9 and #11 have one parking space. #3 is a North/pool facing unit on the first floor, #9 is a South/street facing unit on the third/top floor, and #11 is a North/pool facing unit on the third/top floor directly across the hall from #9.
Posted by: SocketSite at September 6, 2006 1:09 PM
This is really a textbook example of how the market prices a view, and perhaps the floorplan.
Posted by: Anonymous at September 6, 2006 3:01 PM
"This is really a textbook example of how the market prices a view, and perhaps the floorplan."
Not really, I think this is more an example of market irrationality. Without knowing the facts, I would GUESS that the buyers of #9 were not very well informed (or were misguided by their greedy realtor) and based their bid on the #3 comp. I can well imagine this conversation "You know, #3 sold for $827K w/o parking, so if you want this one, you have to bid $859..". As PT Barnum said, a sucker is born every minute and a fool and his money are soon parted.
Obviously the buyer of #11 was more careful and offered the last asking price ($749K) at which point the seller (rightly) thought that a bird in hand is worth two in the bush...
Posted by: Laughing_at_dumb_buyers at September 6, 2006 8:35 PM
The value of anything is established by the price at which a seller is willing to sell, and a buyer is willing to buy. Regardless of what sales pitch was presented to the buyer in this case, he/she saw the product he/she was buying, and he/she was willing to pay the price for what he/she saw. If that's how much this buyer was willing to pay for #9, this is what the market is telling us how much the view/floorplan was worth. What's one person's junk is another person's treasure. Regardless what your subjective view is of this transaction, you are not the market, since you were not the buyer. The one who bought #9 IS the market, and this is objective evidence of the value of this view/floorplan, and this is what apprasiers rely on in establising value.
Posted by: Anonymous at September 7, 2006 12:16 AM
I may stand corrected on the concept of "value", but the corollary to your argument is that the moment #11 closed at $749K, the 'value' of #9 took a hit in view of the lower comparable sale. Isn't that so?
Posted by: Laughing_at_dumb_buyers at September 7, 2006 9:01 AM
It's not clear whether you meant #3 or #9 that took a hit. If you meant #3, then I would say theorectically, based on this limited set of facts, it did take a hit if its value is based on this comparable sale alone, as #3 appears to be inferior to #11.
If you meant #9, then it goes back to what I said before, the market is pricing the view/floorplan offered by #9 at a $110k premium, as #11 and #9 closed around the same time, and #9 has a superior view and floorplan.
Of course, we are all presented with a very limited set of facts; nevertheless, it's a very interesting case study.
Posted by: Anonymous at September 7, 2006 10:24 AM