A Bird in the Hand

Most mornings, I rise early and meet my good friend, Ann, to walk the dogs around Lake Temescal or the old railroad path behind Montclair Village. It's a cheerful way to start the day while getting a little fresh air and exercise. Because Ann is also a Realtor®, we invariably discuss our transactions, our challenges, and the industry at large. (News Alert, Real Estate is experiencing the biggest upset since the inception of the Multiple Listing Service. Have you heard?) ​

After recounting a client's disappointment at what we thought was a "win" in no uncertain terms, Ann turned to me and matter-of-factly stated: "Today's disappointment is tomorrow's relief." Ann has a way of succinctly sizing up the situation.

Given that we are more than three-quarters of the way through 2024, I thought it worth running the numbers to give us all a small reality check.

As of today, 83 properties are either pending or have sold in Piedmont, with an average list price of approximately $2,283,000, and an average selling price of approximately $2,640,000. The highest selling home YTD was for a magnificent manor on Muir at $6,200,000, while the lowest sale recorded in 2024 thus far - per the MLS - was for a small home on Cambridge at $785,000. The price-per-square-foot (PPSF) averaged out to $988, and days-on-market (DOM) came in at a swift 13. That's encouraging news, given the higher interest rates and the significant hit most Buyers are absorbing by way of much higher insurance premiums. In short, the market has remained fairly positive in spite of stubbornly high interest rates.

How's that compare to last year?

In the first nine months of 2023, 93 Piedmont properties transferred ownership at an average selling price of $2,898,000 or $993.57 PPSF.

What's not selling?

Homes in the hills, and those at the very high end; estates on Glen View, Hampton and Sea View that are asking above $7 million are failing to procure the high net-worth Buyers. These properties are languishing on the market for months, not weeks, and certainly not days. That's interesting to note when you consider that high-end Buyers often purchase with cash, and are the LEAST likely buying segment to be affected by interest rates OR insurance rates for that matter.

What's the hitch?

I chalk it up to a change of lifestyle and priorities. Owning a marquee home that requires a full-time staff to run and maintain doesn't seem to appeal to this new generation of wealthy individuals. They'd much rather have a very nice (but not grand) home in town, a condo in Sun Valley, and a get-away in Hawaii, instead of investing in a 28-room mansion that's fairly obsolete by today's standards. Experiences seem far more preferential than material possessions, which is a shift from the stately manners that previously advertised a person's "wealth." (More power to them.)

What's more disconcerting; however, is the high number of Active, Coming Soon, or Pending homes currently on the market in Piedmont, which number 36, compared to 16 listings in the corresponding time frame last year. Typically, the fall market slows down; this year it seems to be speeding up.

Why the sudden rush?

Maybe everyone is hoping to sell before the election. Or to rephrase Ann's sentiment, today's certainty beats tomorrow's question mark. Either way, there's lots more to choose from, and Sellers should keep that in mind with respect to their expectations. It's of no value to push beyond the point of reason if you've chased the market away, and if there's suddenly more supply than demand, we're likely to see prices shift in more meaningful ways.

Especially as lenders are getting more conservative, interest rates have actually jumped back up in light of surprisingly positive labor numbers, and appraisals aren't always hitting the mark. Which is why I've always been a "bird-in-the-hand" kinda gal.

When push comes to shove, Sarah and I are going to encourage Sellers to work with the offers in hand, instead of hoping for more in the bush. In our experience, the best offers emerge at the start of the process, not at the end, and chasing the market down will only put you at a distinct disadvantage.

Speaking of birds, chasing birds is one of my dog's favorite activities, which is fine, if you're a dog (don't worry, he never comes close to catching anything) but not so great if you're a Seller. I caution you to take care come the offer date and look at things realistically; there's a fine line between a successful sale, and a failed escrow.

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