patrick.net

tatupu70 says

I haven't seen that study, but I've seen similar ones and don't doubt the
conclusion. It makes sense that when you market to a larger pool of buyers, the
supply/demand curve intersection would move slightly to the right and yield a
slightly higher price.

My take on it is that the seller invested in marketing to increase the value
of his house, no different than if he had put in new carpeting or granite
countertops. Would you say the buyer paid for the carpeting? His investment
returned a higher price.

The buyer didn't pay for it any more than he paid for any other improvements.
He simply paid the market price.

Regarding the physical improvements, I think it depends upon what is done, but you too likely have seen those articles that say that improving a bathroom usually nets 105% of the installation cost, whereas other things such as lining the basement only nets the seller 80% of his cost at closing. So in these cases I guess its a "yes and no" as to whether the buyer or the seller pays in the end.

In any event, the only point I was making was where 2 properties were physically identical (same improvements or lack thereof) and the only difference was the broker or FSBO. In this case, the buyer effectively pays because as you note, the supply demand intersection has changed - so you can say (somewhat perversely) the market has changed.

BTW, I saw this once in practice where my client was trying to sell his raw land FSBO at price X. He didn't have much luck so eventually he got a broker who also listed at price X. When the broker got an offer at price X, and presented the settlement statement to my client, he was suddenly dissatisfied with his cut which was reduced by the brokerage fee. Accordingly, the seller rejected the offer and had the broker relist the property at price X + 2.5% (the customary amount for commercial prop).

As you can imagine, the potential buyer got pissed and that deal fell through, but eventually the broker found another seller and closed a the new price X + 2.5%. It was interesting because it was one of the few times that I have actually seen where a study was validated in real life.

Houses like this make me want to grow really long arms and give my house a hug.

I wouldn't piss on Danville if it was on fire.

CrazyMan says

Houses like this make me want to grow really long arms and give my house a hug.

I wouldn't piss on Danville if it was on fire.

Crazyman - I was recently looking at some old (circa 2010-2012) threads about the future of the high end "fortress" markets, and there were at the time some fairly bold statements/predictions from you about how those fortress areas were going to get creamed (and not just in real prices mind you -- oftentimes we are talking percentage terms here). I can show you these if you like, but I think you know what I mean.

In any event, later into 2012-2013 we didn't hear much more of that from you until you re-emerged having bought in Boulder Creek. That said was there ever a "come to jesus" moment when you realized those declines weren't going to happen? Alternatively, if that is not the case, do you still think they are going to happen? (again percentage terms, not real declines via stagnation/inflation)

I realize this seems like out and out trolling on my part, but in all honesty, I am somewhat fascinated by the collective doomish psychology of this blog back in those days. It was so combative back then such that anyone who had the temerity to suggest that prices would hold (not necessarily rise, but hold) they were often shouted down from the gallows as being a cockeyed optimist. Granted, you weren't one of the more frequent "doomers" but in terms of your effective confidence or certainty big declines were on the way, well you were right up there with the best of them.

No, I don't really care actually. It doesn't bother me at all :)

I was wrong, obviously. It happens. I never thought the govt. would come in and prop up the house of cards that is housing and the US economy to the extent that it has.

That being said, I came across a short sale that I couldn't pass up, at an interest rate that was peanuts. 3000K sq ft custom house, on an acre, for less than 500K, at 3.5 percent.

It wasn't really a "come to jesus moment". I just came to a point in my life where I was about to have a family and needed more space, so I basically threw in the towel and said fuck it :)

That's Bettencourt Ranch, not Blackhawk. It's a lower-priced subdivision and a decent neighborhood, though as desirable as some other pockets.

Blackhawk, even in the good times, is generally the slowest-selling market in the Danville-Diablo-Alamo stretch. Too many huge and expensive homes, many built in the 80's and needing updating, and too far from the freeway. But, yes, you are right... it has slown more over the last couple of months.

CrazyMan says

No, I don't really care actually. It doesn't bother me at all :)

I was wrong, obviously. It happens. I never thought the govt. would come in
and prop up the house of cards that is housing and the US economy to the extent
that it has.

I wish I had more time to respond, but (and I mean this with all sincerity) this response has largely restored my faith in the potential usefulness of this blog. FWIW - Accountability is a big big deal for me. Anyone can say just about anything no matter how bold, shocking, or otherwise, so long as they are willing to put their ego in check and be held accountable if what they said turns out wrong (as Tatupu says - "own it")

That being said, for most here, its as if the words I WAS WRONG are so verboten that if they dare mention them, if they dare let their fingers put those words on text, its as if they will instantly burst into flames and cease to exist (witness my current attempts to hold Thomas Wong accountable for his utterly asinine statement that SF has been in economic decline for 50 years).

I assumed you like most would deflect, flail, spin, ignore, etc. yet you did none of those -- you simply manned up and owned it. It happens to all of us eventually, and here I am no different. Still, in all seriousness you just gave the single most courageous answer I have ever seen on this blog. This makes you one of the good guys, IMO. Cheers!