Currently Reading

Hot Market and Listing Tactics Make Identifying Home Values Difficult

Advertisement
Market Data + Trends

Hot Market and Listing Tactics Make Identifying Home Values Difficult


September 7, 2021
woman thinking
Photo: Natee Meepian | stock.adobe.com

With nearly 40% of homes selling over asking, many buyers play guessing games with their bids. A family of two told The New York Times that they thought their offer of $850,000 for a $799,000 home in Berkeley, Calif. would suffice, but the property sold for a whopping $1.4 million. Roughly 80% of homes in Berkeley have sold for more than asking price and it’s the most overbid metro in the country with homes selling for an average 19% over asking. Brokers in the Bay Area have a tactic: they underprice homes to draw in as many offers as possible, often resulting in homes selling for well over asking.

Mr. Stea said that while he was surprised the Rockridge home went for as much as it did, he knew it would go for well above the asking price. “I’m a true believer in that the market will always tell the truth,” he said.

The strategy is to create something of a blind auction where buyers try to puzzle out a number that the sellers’ will actually accept and a number that’s higher than all the other offers. It’s a local quirk that everyone seems to acknowledge is just the way that things are done here.

Jodi Nishimura, a Compass agent based in Oakland, said she was surprised when she moved to the area from New York in 2002 and saw how listings were priced lower than their worth, usually around 10 percent less at that time. “It wasn’t common to see homes go for 50 percent over the listing,” she said. The Covid housing boom has made things worse, she said, with certain homes — particularly ones with great outdoor space — selling for huge premiums, well above their listed prices.

Buyers tend to loathe the underpricing — describing it as everything from “a sick game” to “bizarre.” But brokers say it works well for sellers. “Sellers want to keep the bidding war blind,” said Mr. Stea, who had the Rockridge house that  sold for more than $1 million over asking. “But it disfavors buyers because they’re shooting in the dark.”

Read More
 

Related Stories

Market Data + Trends

Multi and Single-Family are Neck and Neck

An analysis by National Association of Home Builders shows that single-family construction activity recently closed that gap with multifamily.

Market Data + Trends

Americans Hate the Housing Market

Americans aren't just balking at home prices. Their outlook toward the entire economy is abysmal.

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.