The MLS provides us all with a fairly regular chuckle or eye-roll. Bang-bang, two popped into my mailbox as cautionary tales of properties trying to find their way to a buyer. No, this isn’t a hatchet job. The properties aren’t bad. What it comes down to is pricing realistically and showcasing properties in their best light in a market that’s less steam-full. Apparently neither Realtor read my recent piece deciphering the clues for an overpriced home. Today I’ll start with a property with a mysterious and meandering series of price drops. On Friday, stay tuned for the home with the 16,029 percent price hike (if for no other reason, to be sure it’s not yours).
1505 Elm Street, Unit 1203
Unit 1203 is a three-bedroom condo with two full and one half bathrooms covering 2,045 square feet. It’s currently listed with Krystal Womble of Krystal Womble Elite Realtors for $369,995. Last week, it popped into my email as “reduced” and so I clicked. It was originally listed on Feb. 15 for $429,900. Meaning that in five months, it’s lopped off $59,905 or 14 percent from its price.
But in those five months, there have been nine price drops. The most recent drop on July 5 was when the June 21st drop was further reduced by … wait for it … wait for it … $4. Yes, $4. The first price drop came nearly two months after listing on April 12 and was for $150. Sure, there have obviously been some big drops … nearly 60 grand, but clearly it’s not selling because it’s $4 overpriced.
In fact, this home tells its own story. Prior to the current owners, the unit had been on-and-off the market for nearly six years — that’s 2,125 days on market. Back in December 2008, that owner had high hopes listing the property at $415,000 (then $425,000) before it was sold to the current owner in 2014 for something south of $339,000. But look at the see-saw of prices. In December 2008, after six months and no one wanting it, the price is raised $10,000? Then seven months later you drop $100,000 before raising it again in July 2013, at which point it took another 14 months to sell to the current owner?
The current owner and their Realtor are making a series of rookie mistakes. First, building comps say that in April 2016, the unit two floors down sold for roughly $45,000 less than their current price or roughly $100,000 less than their original asking price. But in May 2017, three floors up, the bedroom-fewer unit 1503 sold for roughly $30,000 less than 1203’s current asking price (the bedroom markup). Looking at photographs of these units, they feature the same finishes that were offered when the building was converted from office to condos before the recession. Obviously the 1503 buyer saw both units and went with the smaller/higher unit even though it it meant paying the second highest square foot sale in the building for nearly two years.
Mistake two, not understanding the building. Looking at historic pricing would show there hasn’t been a lot of uplift in prices at 1505 Elm, contrary to most Dallas properties. In 2017, there have been four sales, two roughly $198 per square foot and two averaging $143 per foot. Without 2017’s two high sales, the building average cost per square foot has so far dropped from 2016. I think hopes were pinned on the higher resales which are out of step with the overall average. The problem with using that other single high January sale as “the comp” is that it was different. It was a corner unit with tons more window space that buyers pay for. It was also staged beautifully.
The fact that the current owners purchased their home after it had been on the market for nearly six years should have been a clue that it would be equally difficult to sell, especially a mere 29 months later. Trying for a $100,000 bump (30 percent) over last year’s sale of an identical unit was never going to work. Just because the headlines trumpet that Dallas prices are up, doesn’t make it true on the micro level.
Mistake three: Pictures. Within the listing, a buyer has to navigate to picture 11 before seeing inside the unit, and that picture is a shot looking back at the closed front door. Not exactly imagination-sparking.
The pictures are also very low-resolution – one picture is a measly 160 pixels square. Putting that into perspective, the Motorola Razr flip phone, launched in 2004, had a camera capable of taking photos with 1200-by-1600 pixel resolution while the full-width pictures you see on CandysDirt.com are 640 pixels wide).
There is also no indication of the cadence of the room layout. This first entry picture leads to what appears to be an office/child’s play room and then to a bathroom, then kitchen then a fireplace. It’s a high-rise — show the floor plan or at least post pictures in some order.
The home is not staged and appears to have been shot mid-move-out. The child’s room/office is lightly furnished, as are the entry and one picture of the living and dining room.
In fact, it’s these two pictures, with a glimpse of the kitchen, that hint at the open concept layout of the living areas. Although still no idea where that fireplace fits in. The fix for these photos is an easy one. More and higher-resolution photographs when the home was lived in (or staged). A floor plan (provided free by the building manager). And a listing with the best interior pictures first.
Good Realtors will tell you that overpricing a property is an almost guaranteed way to ultimately get less for it … and this Realtor may have had that talk with the owners who decided they knew better. Krystal Womble’s other listings, including a great home on Richard Avenue, are completely (wonderfully) different … good pics, staging, etc..
That said, today we see a new listing with the same agent for unit 305 in the same building that, at $375,000, or $190 per square foot, is again priced comparably with those two abnormally high sales. Unit 305 is another pretty standard interior with the same original kitchen and bathrooms. I get wanting to maximize a selling price, we never want to leave money on the table, but sometimes that strategy doesn’t pay off. And if you are going for that brass ring, you have to market the heck out of the property with staging and good photos. On the upside, the new listing does have some (not all) higher resolution pictures.
A full-price offer on unit 1203 would be 86 percent of its original asking price. Whatever the next owner pays will be less than that. I’m skeptical whether the current owner will turn a profit on the sale of this unit. It’s likely that more realistic pricing from the get-go coupled with better marketing of the property would have changed this unit’s trajectory. One thing I am sure of is that a $4 price reduction didn’t get the phone lines lighting up.
In two years, lightening struck twice for two units at 1505 Elm. Is that enough to lift an entire building’s selling prices going forward?
On Friday, see the home with the 16,000 percent price increase. Oopsie!
Remember: High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. If you’re interested in hosting a Candysdirt.com Staff Meeting event, I’m your guy. In 2016 and 2017, the National Association of Real Estate Editors has recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards. Have a story to tell or a marriage proposal to make? Shoot me an email firstname.lastname@example.org.