Listing a home in Los Angeles with a sky-high price tag? Expect one of two things to happen. Either there will be a flurry of viewings and multiple offers above the asking price — or, it will land with a thud, languishing on the MLS indefinitely.
The 10 priciest sales last year in the tony neighborhoods of Holmby Hills, Bel Air, Beverly Hills, Malibu, Brentwood and Westlake Village fell into those two categories. Homes in those areas that sold in under 180 days averaged 70 total days on the market, according to a new study conducted by New York-based Concierge Auctions. But listings that didn’t sell within that timeframe sat on the market for an average of 706 days.
Part of the problem, insiders say, is the stigma of the lingering listing.
“Buyers now are so savvy that if a property is for sale for any length of time they think something is wrong with it,” said Jeff Hyland, president of Hilton & Hyland. “With people from all over the globe buying, the question [buyers] ask is, ‘Why has that house not sold?’ You can look at the time a property is on the market and gauge from there where it’s going to end up.”
Homes either sell swiftly, at around asking price, or languish and need “price reduction after price reduction,” said Aaron Kirman, president of the International Estates Division of John Aaroe Group.
The report indicates this phenomenon is not unique to L.A. It looked at the 10 priciest sales in other luxury markets, including Miami and Vail. Nationally, the most expensive luxury homes that sold in less than 180 days averaged 80 total days on market and scored 93 percent of the original list price. Houses that remained available after 180 days averaged 774 days on market, and sold for only 77 percent of their ask.
“Brokers have to capitalize on the opportunity of being new to the market,” said Chad Roffers, chairman of New York-based Concierge Auctions. “Either it’s going to happen then, or you fall into the category of being overexposed, and your days on market go up.”
After all, nobody wants another Michael Jordan saga on their hands. The basketball legend’s 56,000-square-foot Highland Park, Illinois mansion has been on and off the market since 2012, and its price has crept down from an original ask of $29 million to $14 million-and-change.
“Every market has those stories,” Roffers said. “The challenge is in the pool of buyers. When you reach the tippy-top of the market, it’s rare air. The market is small.”
No broker is protected against such “anomalies,” said Kirman, who has been brought in several times as a co-listing agent on a hard-to-budge home.
“A trophy property that costs a crazy amount of money might sell quickly,” he said. “Or it might not.”
When a house is stuck on the market, it is essential that brokers go back to the drawing board, Kirman said. When he is brought onto a lingering listing, he orders new photography and videos and reaches out to different buyer pools via media outlets.
“There are always going to be new ways to expose a property,” he said.
Sometimes changes to the look of the house are in order, too, said Tami Halton Pardee, CEO and owner of Halton Pardee + Partners. Pardee was recently faced with a lingering listing where potential buyers “could not see past the house’s old, outdated color,” she said. After she consulted with the seller, the house was painted “a stunning red that meets the aesthetic that people gravitate to in today’s market.” It sold right away.
Another trick that worked wonders: adding a carport to a house that had no garage but plenty of exposed parking, Pardee said.
What’s most important, brokers say, is to be prepared with a compelling story.
“If you’ve been on the market a long time, you should have a story prepared to tell buyers [and their] agents as to why the home has not sold – because they will ask,” said Connie de Groot of Nourmand & Associates. “Offer that story whether they ask for it or not. You don’t want them thinking the house has been on the market because it’s not a good house.”
Online listing sites like Redfin and Zillow provide a level of transparency that can exacerbate the problem of a lingering listing.
“There’s no hiding when it comes to the history of the property,” Roffers said. “It’s been on the market, you’ve cut the price, you’ve taken it off, put it back on. It’s available for everyone to see. It’s like getting a tattoo. It’s always there.”