The San Diego real estate market is on fire right now, home prices in my area are up 20% over last year and in nearby neighborhoods like North Park 92104 there is only 1 month of inventory at the current sales pace! It’s putting a real damper on the local house flippers as they are having trouble finding properties to rehab. 3 guys I personally know are going to Phoenix, Las Vegas and Palm Springs to find projects.
Strategically, I put it on the market on a Tuesday to give everyone time to react before an MLS advertised double-open house weekend. The strategy worked out perfectly, by the open house we already had 3 offers to work with. In this market its common to have 10-15 offers within the first few days, but this is generally true for entry level houses or high demand markets in the suburbs. By leaving the house on the market a whole 8 days, I felt it gave adequate market exposure yet didn’t irritate any of the first buyers by waiting too long and playing the game.
We had a specialty product for a very special buyer, in an inner city neighborhood where median sold home prices are in the low 500’s. To illustrate the market appreciation this year, when I bought this vacant lot I calculated a house built there would have sold for $629,000 based on comps. Half way through the build there were 2 comps at $685,000. By the time I was done we had sales comps in the low 700’s for remodels, not new construction, so I put a value on the home of $750,000. Not having a back yard was a definite negative so I had to price this in. You know that the seller does not set the sales price, the market does. A house will sell for whatever a buyer is willing to pay. Furthermore, houses are not sold, they are bought, so listing agents don’t “sell” houses in my opinion.
I used value range pricing and listed the house at $749,000 – $799,000. The first offer came in at $710,000. The second at $749,000 and a third at $750,000. When the smoke cleared, and after everyone had a shot to go higher, we countered the strongest buyer of the 3 offers and they came up to $765,000, or $413.50/s.f.
Listing this house and getting it under contract was the easy part, getting SDG&E to install the gas meter so we could close would prove to be the hard part and took almost 8 weeks! Our wonderful buyer hung in there so we finally closed today, congratulations to the new owner and we hope you enjoy the home as much as we did building it.