Palos Verdes Real Estate
Home"Palos Verdes Resident since 1947"
March 2019 Newsletter
March, 2019
Dear Neighbor:
The word is out! Did you see USA Today Online where Palos Verdes Estates was ranked the best city in California in which to live? Not one of the top 10, or top 5, but the best.
Housing prices are currently on a very slow downward trend. There is still a shortage of homes for sale, which is working against an otherwise more rapid decline. Remember the “no doc” loans of the early 2000’s, where the lender just believed what you wrote on the loan application, without supporting documentation (thus “no doc”)? This type of loan was cited as one reason for the 2008 meltdown. Well, they’re baaaaack. I’ve seen them being advertised the last month or so.
One subject that often comes up, and I got into a bit last time, is determining an accurate asking price for your house. This can be difficult to do, especially in an area of custom houses, which is why you often see “dollars-per-square-foot” used. This is probably the worst way to price your house. While it has the attraction of being simple and has the appearance of objectivity, it’s not accurate. For one thing, generally the land comprises 75% or so of the total value of a house. Using the square footage of only 25% of the value to determine the total will give skewed numbers. This is why homes with smaller square footages sell for more dollars per square foot than larger ones. If you follow this logic to the end, a vacant lot would be free. Haven’t seen too many of those.
The other problem with using dollars per square foot to determine value is that it does not account for important factors such as the condition of the house, the size or quality of the lot (is it flat, or is half of it vertical?), what kind of view, if any does it have; is 1/3 of the square footage a huge 1963 family room addition; is the location good or is it on a busy street or across the street from the school student drop-off; do you have to pass thru one bedroom to get to another; is it original or a total remodel, etc. These are subjective, less-easily quantifiable qualities that cause problems for agents who don’t regularly look at Palos Verdes property, but is a major reason you hire an agent. If you just finished a $250K remodel in the past year, I’m sure you’d like to receive some compensation for it. When an agent from out of the area is trying to get his rare PV listing, he is unequipped to compare your house to past sales in most of these areas. You have to have been inside the house when it was for sale, perhaps months ago, to know how flat the lot, how good the view or floor plan or remodel – in fact, pretty much anything other than the size of the house and lot. Just as I don’t spend time looking at houses in Manhattan Beach (nothing against Manhattan Beach – it’s a fine town, but there is only so much geography an agent can cover and claim to know anything about it), out of area agents don’t spend time looking at houses in PV because their prospects of getting a client for PV are about like mine for Manhattan Beach. So, as you can understand, they often come up with wildly inaccurate prices, based generally on the only thing they know – the square footage of the house. There have been plenty of examples during the past year, many of which are still on the market. So I say again, ask the agent you’re interviewing for a list of homes they’ve sold in your area – this is the best indication of their familiarity with it.
I’ve got a couple of nice houses coming up in Lunada Bay in the next few months, so give me a call (310 613-1076) or visit my website – www.DanaGraham.com. I look forward to hearing from you.
Dana Graham, Realtor®
Berkshire Hathaway Home Services
CA DRE #00877973
310 265-2141 (direct)
310 613-1076 (cell)
Top 10 agent
in PV in listings sold