There's a weird psychology happening now around SF's over-heated and wildly expensive housing market. Basically, if realtors put things on the market for what they actually should be priced at, given all the demand and recent comparables, etc., they just sit there. But as several realtors explain in this Chronicle piece today, under-pricing means people think they're getting a deal, and then they start a bidding war, leading to many homes selling for well over their asking price in some cases $1 million over asking.
Realtor Alan Canas uses the example of a four-bedroom, four-bath house on Everson Street in Glen Park that recently sold for $2.8 million, $1 million over it's $1.8 million asking price. This was back in October, and he thought it would sell for around $2.3 million or $2.4 million. But, he says, "If we had priced it at $2.2 million, I honestly don’t think it would have seen the play (it got) at $1.8 million. It’s psychological, almost a game."
And of course, that buyer benefited by being able to pay all cash, because Canas says the house never would have appraised for $2.8 million if the buyer need a loan.
There are more stories like that one in the piece, and sale prices of $1 million over asking have occurred 10 times in the last year.
Tune in to watch the insanity on the SF edition of Million Dollar Listing, which starts July 8 on Bravo.