The list low, sell high pattern in San Francisco real estate has been going on for years. But a trend surfacing in April points to the willingness of some buyers in the $2,000,000-$3,000,000 range to pay anywhere from $500,000-$800,000 over asking for a single-family house to “win” their personal bidding wars.
That’s what five sets of buyers did last month, in neighborhoods as varied as the Central Richmond, Forest Hill, Forest Hill Extension, Ingleside Terrace, Eureka Valley/Mission and Bernal Heights. Let’s take a look:
571 20th Avenue * List: $1,388,000 Sold: $2,100,000 ($712,000+)
2177 9th Avenue * $2,195,000 | $2,750,000 ($555,000+)
64 Mercedes * $1,895,000 | $2,700,000 ($805,000+)
164 Vasquez * $1,050,000 | $1,703,000 ($653,000+) [Cash]
817 Guerrero * $1,995,000 | $2,725,000 ($730,000+) [Cash]
290 Rutledge * $1,199,000 | $1,710,000 ($511,000+)
These were not 20+ offer situations, which begs the question as to what motivated such excessive sale prices. In the case of 64 Mercedes (photo, left), the property had been available at a much lower price off market prior to hitting the MLS. And 817 Guerrero, despite being a block from Dolores Park and near Tartine, was a two-bedroom house with less than 1500 square feet and no real expansion potential.
Here’s to hoping that this activity is not going to turn into a long-term trend that could completely discourage home buyers—and set unrealistic seller expectations. Crazy overbids are usually unique in that they’re the result of one buyer paying well above all the other offer prices. But the sale prices become part of the MLS data, and set certain standards for future sales.
I do have encouraging news for prospective buyers, though: The average citywide house overbid was only ten percent in April.