The Truckee/Tahoe real estate market enjoyed an especially strong second quarter at lower price points this year, with more than half of the homes at $1 million or less in Truckee selling at — or above — asking.
It was a spring marked by bidding wars and strategic underpricing, with sometimes stellar results for sellers looking for a quick close at top dollar.
One of the most notable was a three-bedroom home on a stretch of Skislope Way in Tahoe Donner backing up to open space and a year-round creek.
It was a well-built home with nice log accents (nothing off-the-charts fancy), and on the small side at less than 2,500 square feet. It was priced at $835,000, and it sold in a week for more than $92,000 over asking price.
But what does an experience like this mean for the buyer?
The second quarter this year started with very limited single-family inventory at more affordable price points (below $1 million), leading to somewhat of a feeding frenzy among buyers. When the pent-up demand was unleashed on a new listing that showed well in a great location, the result was a white-knuckle experience for buyers.
In many cases, these homes were priced below market. It’s a risky strategy, but in a seller’s market, it can lead to a fast sale at top dollar. For buyers, it presents a conundrum.
As a realtor who knows her market, it’s obvious to see that a home is underpriced. But how do you counsel buyers to pay three, five, or more than 10 percent over asking? No one wants to overpay. But neither does anyone want to lose that perfect dream home.
I was in that sweaty-palm situation several times this past spring — with buyers who reluctantly offered over the asking price, only to be devastated to learn they had been out bid. Others came in high and later suffered a serious case of buyer’s remorse, feeling they had been pressured into over-paying for a property. One pair of buyers found the bidding wars so distasteful that they decided to walk away.
For sellers, the past few months have been great, and even those homes that sold for less than asking closed mostly within one to three percent of the asking price. The luxury market was softer, with just a few dozen $1-million-and-above-priced sales at the lake and the ski areas — the majority of them closed for less than asking.
The quarter two lesson for sellers reinforces a pricing rule in real estate: price high, and you are likely to wallow on the market and fetch less for your home than if you were priced right from the start and marketed by a professional who does more than the 3-Ps (put it on the MLS, put a sign in the front yard, and pray).
If you are thinking of selling, ask for specifics on pricing and your realtor’s marketing plan. If you are priced competitively, will they pre-market? What, specifically, will that entail? Print advertising makes everyone feel good, but the web is where the buyers are today. You need to work with someone who understands electronic advertising, and, above all, someone who knows her market.
~ Jackie Ginley works with Dickson Realty in both California and Nevada. Contact her for advice on buying or selling your home or investment properties and browse both sides of the state line at TahoeisHome.com