Luxury homes spend far more time on the market and typically sell at bigger discounts, largely thanks to unrealistic pricing.
Much of the pricing dilemma comes from sellers ignoring their agents’ advice.
“Luxury-home sellers have the psychology that they can afford to wait and see,” Compass’ Tomer Fridman told the Los Angeles Times. “I try to explain: every day that goes by, you don’t gain leverage—you lose it.”
Homes in L.A. County priced above $3 million that sold in October spent an average of 65 days on the market, more than twice the 31 day-average that homes below $3 million spent on the market, according to Open Listings research cited by the Times. Just 8 percent of luxury homes sold above ask, compared to 30 percent of homes in lower-priced segments.
Luxury homes that hit the market in L.A.’s priciest neighborhoods tend to go one of two ways: either sold relatively quickly or left to grow stale on the MLS.
Still, luxury sales volume was up in the third quarter by 35 percent year-over-year, according to Compass. So while a home still might eventually sell, it’ll be for far less than an optimistic seller thought—and most likely at the price a savvy agent suggested in the first place.