Explain this house pricing to me

[Anonymous]

I have a thing for real estate, so was browsing Redfin for today's open houses(of which there aren't many!), and saw this house in Brookland. Since Redin provides past sales history, we know that the house sold for $225K in February. It's now on for just under $650K. What?!? What am I missing here? It's obvious they did work, but it sure doesn't look like a $425K improvement to me. (Not to mention some of the renovation choices - I totally don't get the 'coy' pond, but that's me - not a big fish person here, and koi don't appeal).

http://www.redfin.com/DC/Washington/1523-Newton-St-NE-20017/home/10093425

And on a side note, can someone explain the rationale for not addressing these kinds of price changes in the listing? I know you're trying to make money on the house, but come on - it's an almost 3x increase in house price in 6 months of a terrible economy/housing market, don't you think a little justification would help?

[Anonymous]

Anonymous wrote:I have a thing for real estate, so was browsing Redfin for today's open houses(of which there aren't many!), and saw this house in Brookland. Since Redin provides past sales history, we know that the house sold for $225K in February. It's now on for just under $650K. What?!? What am I missing here? It's obvious they did work, but it sure doesn't look like a $425K improvement to me. (Not to mention some of the renovation choices - I totally don't get the 'coy' pond, but that's me - not a big fish person here, and koi don't appeal).

http://www.redfin.com/DC/Washington/1523-Newton-St-NE-20017/home/10093425

And on a side note, can someone explain the rationale for not addressing these kinds of price changes in the listing? I know you're trying to make money on the house, but come on - it's an almost 3x increase in house price in 6 months of a terrible economy/housing market, don't you think a little justification would help?

I've seen the inside of that house, and it has been thoroughly renovated -- a lot more than the quick cosmetic fixes that most flippers do -- and that renovation was done in a nicer and more tasteful way than most fixed-up houses in that area. I think that increased the property value by a ton. But it still doesn't justify the price they're asking: that house is seriously overpriced, and I'd bet it's going to sit on the market until they cut the price substantially.

[Anonymous]

I don't know. It is a little high, but more in line with sales and listings in the neighborhood than 275. My guess is the house was completely trashed or it was sold to family members, in combination with the sellers being the original owners who paid way less than the 275 so were still making a profit.

Again, high, but it is updated and renovated, and even if you don't like it, it doesn't matter what the sale price in March was, as that is a clear anomaly. What matters is sales and listings in the area, and this is only slightly above.

[Anonymous]

looks like an investor got it for a good price, renovated the whole house, and is trying to flip it and is hoping for as much as they can get...

https://www.taxpayerservicecenter.com/RP_Detail.jsp?ssl=4006%20%20%20%200010

[Anonymous]

Anonymous wrote:I don't know. It is a little high, but more in line with sales and listings in the neighborhood than 275. My guess is the house was completely trashed or it was sold to family members, in combination with the sellers being the original owners who paid way less than the 275 so were still making a profit.

Again, high, but it is updated and renovated, and even if you don't like it, it doesn't matter what the sale price in March was, as that is a clear anomaly. What matters is sales and listings in the area, and this is only slightly above.

Exactly. Buyers love to point out "what you paid for this house in 2006 doesn't matter, it's what it's worth now!" Well, the same is true here. It doesn't matter what was paid for it in March, especially if it wasn't a valid sale price (i.e. foreclosure, inside sale, etc.). It seems slightly above comps, but that's probably because they are leaving room to negotiate down a bit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't know. It is a little high, but more in line with sales and listings in the neighborhood than 275. My guess is the house was completely trashed or it was sold to family members, in combination with the sellers being the original owners who paid way less than the 275 so were still making a profit.

Again, high, but it is updated and renovated, and even if you don't like it, it doesn't matter what the sale price in March was, as that is a clear anomaly. What matters is sales and listings in the area, and this is only slightly above.

Exactly. Buyers love to point out "what you paid for this house in 2006 doesn't matter, it's what it's worth now!" Well, the same is true here. It doesn't matter what was paid for it in March, especially if it wasn't a valid sale price (i.e. foreclosure, inside sale, etc.). It seems slightly above comps, but that's probably because they are leaving room to negotiate down a bit.

I'd agree with all of that except the "slightly above comps" part. At $650K, it's more than $100K above any reasonable comps. In the last year, only two houses in Brookland have sold for more than $550,000, and both were better located and much, much larger.

[Anonymous]

Most of the bathroom and kitchen reno was done with cheapest Home Depot has to offer. So while it may look nice, don't kid yourself about getting a "top-of-the-line" reno. Definitely not worth that price, and the neighborhood looks pretty crummy. YMMV.

[Anonymous]

OP here - thanks all for the replies, it confirms my own impression of the like situation. And I must concur with the PP - while the renovation may be well done / above what a flipper would *normally* do, I have to admit it left me unimpressed from the pictures, and certainly didn't seem to be a true 'luxury' renovation.

Anonymous wrote:Again, high, but it is updated and renovated, and even if you don't like it, it doesn't matter what the sale price in March was, as that is a clear anomaly. What matters is sales and listings in the area, and this is only slightly above.

And to address this quote - I somewhat understand why you say that it doesn't matter, but it IS a data point that a potential buyer can see, so I would repeat my 2nd question - why don't listing agents seem to address that issue when it comes to selling houses? Because I'll tell you as a buyer - those past sale prices DO factor into my assessments about houses, especially in terms of my assessment of the position of the seller. So at the very least it has an impact on me as the buyer from a psychological standpoint.

[Anonymous]

If the realtor couldn't get the spelling of "koi" right in the listing description, I wouldn't trust him/her to get the price right either. This type of error makes me think that you're not dealing with someone who is very bright or savvy. And it doesn't say much that the owner hasn't caught the mistake and demanded that the realtor correct it.

[Anonymous]

Anonymous wrote:If the realtor couldn't get the spelling of "koi" right in the listing description, I wouldn't trust him/her to get the price right either. This type of error makes me think that you're not dealing with someone who is very bright or savvy. And it doesn't say much that the owner hasn't caught the mistake and demanded that the realtor correct it.

ITA. People think that this kind of little stuff doesn't matter, but it so does.

[Anonymous]

Have you considered that just maybe the fish are coquettish? Hm?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If the realtor couldn't get the spelling of "koi" right in the listing description, I wouldn't trust him/her to get the price right either. This type of error makes me think that you're not dealing with someone who is very bright or savvy. And it doesn't say much that the owner hasn't caught the mistake and demanded that the realtor correct it.

ITA. People think that this kind of little stuff doesn't matter, but it so does.

+1. It makes the realtor and seller look like total amateurs. Though I do like the possible explanation that the fish are modest.

[Anonymous]

I've toured this house and it is nicely done and has a lot of space and a big yard...but it is definitely way over priced for the neighborhood (sadly). This was done by an investment group so I'm not sure what they were thinking (did they not look at comps?). They started off even higher and had only one price drop. If you're going to list a house for $650,000 in Brookland it better have a garage or at least a driveway!