Given the competition, bids over the asking price are common, although agent Alex Seroff, of DeLeon Realty in Palo Alto, said the pricing strategy needs to be right to attract aggressive offers.
A home with a fair market value of $1.7 million or $1.8 million typically will list at $1.5 million, he said: “I need to get that level of excitement — from a lot of people making a lot of offers — to get the highest price, so I can leverage those offers against each other.”
The strategy worked out for his clients Jamie and Brooke Turner.
The Bay Area natives bought their 2,000-square-foot home in Mountain View’s Sylvan Park neighborhood for $960,000 in 2010.
Looking at Silicon Valley’s congested traffic and steadily rising prices, Jamie, a computer engineer, and Brooke, an ex-teacher who stays home with their three children, decided to sell and leave the area. They listed the home in May for $1.5 million, received 21 offers within a week and sold it for more than $1.9 million, earning nearly $1 million profit on their original purchase.
“It’s definitely a seller’s market,” Jamie said.
They closed the deal in June and moved this month to the Seattle area, where Jamie’s company has an office — and where the family’s new $2.3 million home covers 7,000 square feet on five acres.
In the East Bay, agent William Doerlich has watched as clients chase affordability to Vallejo in Solano County. Buyers are looking for a decent price and architecturally distinguished houses that “are unique, that have a certain feel. You can get that in Berkeley and Oakland, too. But you’ve got it in Vallejo at half the price point.”
His clients Henrique Bagulho and Katherine Du Tiel, professional photographers living in San Francisco, decided to look for an investment property in Vallejo. They stumbled onto a 1924 prairie-style cottage with a view of the Napa hills and decided they wanted to live in it.
The cottage listed for $379,900, drew four offers, and Bagulho and Du Tiel won out, bidding $410,500. They moved in earlier this month.
“Most people seem to think we’re nuts to move to Vallejo,” said Bagulho, “but San Francisco has become too desirable and lost a little bit of its charm. So we’ll probably be doubling our money” — they are about to sell their 1,500-square-foot home in San Francisco’s Miraloma Park — “and we’ll be living in nice quiet Vallejo, less of a hipster city. I like it. I will be able to bike to Napa.”
I talked to one of my friends about this. One of the points of moving is to buy a similar size home that costs far less. Then you can invest the difference. Buying a way bigger home that’s more expensive isn’t going to build wealth for you. That home is going to have much higher maintenance costs.
7000 feet house on 5 acre costing over 2M is going to be at the extreme upper tier of the housing market. It’s illiquid and prone to crash when economy turns south. Not a sound investment at all.
Agree they made a windfall of 1M (tax free/deferred) if done right.
@wuqijun I will PM you about vallejo. Prices seem to have gone up 3X from 2012? Are rents stable? do they take very long to rent? What does a typical 3/1 fixer go for?
Isn’t the median Sunset home almost $2M now? You get 1,600 sq ft and a tiny lot for that? I agree that’s pretty high end for Seattle, but it’s still cheaper than most of the properties on water. Plus, if you have the income to afford that sort of mortgage not paying state income tax is pretty big.
No, I wish… Def at least 1M now for anything half decent. In aggregate, I suppose a good “average” number is somewhere like 1.2-1.3M. Again, houses vary so much here and you have Inner to Outer Sunset…
Hey @RealEstatebull, yes prices have gone up almost 3x. A house selling for $100k back in the days can sell for $400k. More typically though, most homes went from 150k to 350k during this period. So at least more than doubled.
Rents are no problem at all. Takes less than 2 weeks to rent if posted on Craigslist. Can rent for about $2000 per month for a typical 3/2.
Spending over 2M on a 7000 feet house is dumb. You can say the same thing about putting down 300k for a Ferrari. Enjoying life now means being in the poor house later in life.
