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This townhouse + vacant adjacent lot combo was brought to market in July of 2011. The then listing broker priced it at $3.2M, or $1,070 per sq ft, if applying solely the house square footage of 3,000 sq ft to the asking price. If you back out approx $600,000 ($175 per buildable square foot (price of land in that neighborhood) x 3,400 sq ft (allowable building square footage on vacant lot) you are left with $2.6M, or $866 per sq ft. The average comparable home price for closed deals in that location is approx $700 per sq ft (as of late fall 2011). So the original listing price overshot the market by about 20%. That makes it easy to understand why it lingered when other properties were in contract within a matter of days of being listed. So after a broker switch in November 2011 the property (house + lot) is now listed at $2.6M, or $866 per sq ft. And if you reduce $2.6M by the same $600,000 used above to approximate the value of the vacant lot you have an asking price of $2M, or $670 per sq ft, which is 5% below the average comparable. The property has been on the market a total of 218 days from its original listing date and 85 days since its last price adjustment. Average days on the market for the comparable set is 57.
What gives? The property was obviously not priced appropriately from the start. In this day and age of greater transparency, properties that are priced inappropriately have the potential to be deemed undesirable by the entire buyer pool if interest is not immediate for reasons other than price. More days on the market have always resulted in discounts to the original asking price but now the â€śundesirableâ€ť stigma may be putting more downward pressure on the perceived discount.