In Rancho Santa Fe, It’s More Than Just a House
“Inventory is low,” you hear Realtors saying all the time. However, overall in San Diego, there still aren’t enough homes being built as are needed for the people who are moving and living here. Until builders build more homes, land prices in California will simply continue to rise, and homes will continue to be in demand. If homes are in such high demand here on the West Coast, why then, are homes in Rancho Santa Fe having a tougher time selling these days? I couldn’t stop thinking about this question, so I decided to dive deeper into research and come up with a better answer.
I read an article which stated that there were 779 homes sold for over $2million in San Diego county last year, an increase of nearly 20% from the year before. That’s good news. Also, more recently the market has been picking up a bit after being slow earlier this year. (Check out the article!) Another agent wrote that she believes there are not many foreign buyers, and the statistics seem to support this, with all 16 buyers purchasing homes over $5million being from within the U.S.. Struggles in a global economy don’t seem to be making much difference in the Rancho Santa Fe market either. A few reasons why I believe that the luxury market here in Rancho Santa Fe is more of a tough sell these days are:
Non-Comparable Properties: When a unique, luxury home has virtually nothing to compare to, it is really tough to put a dollar amount on square footage. You can see here that the average price per square foot of homes sold in RSF from Jan. 2016 until now is $501.81. However, many homes in RSF include extravagant details and imported materials that can be quite pricey and skyrocket the value of a home. (You can see highest priced sold per sq. ft. is $905!) While it’s easier to price homes in La Jolla based on how wonderful the ocean view is, in Rancho Santa Fe there are fewer factors that can consistently drive the price up or down, and agents have to depend on their knowledge of more than just the zip code or square footage alone.
Poor Pricing Strategy: Most sellers need an agent who will look into the market at a deeper level and find out why homes were recently priced (and more importantly, sold at) higher prices than others. Often times there are many other factors, and sometimes it comes right down to the smallest details such as a bright space and/or an open floor plan. An agent in Rancho Santa Fe needs to have viewed and walked around in many of these luxury homes to really get a sense of their value. Some agents have poor pricing strategies for their clients, in the end, resulting in a longer time on the market.
I found this photo that shows how many homes are active on the market right now based on price, and you can see that as homes increase in price, the number of homes decreases. One exception is with the $2-4million dollar range where you can see that there are quite a few more than the $1.5-$2million dollar range. When a home over $2million enters the market (vs. the $1.5-2m), there are more homes in that price range available, and not necessarily more buyers searching in this price range. This makes it a bit tougher for these sellers to validate the value in their home, especially if they do not have a really good pricing strategy that is based on hyper-local statistics.
Poor Timing: Many agents have no advice when it comes to the timing your home should come on the market, and many studies have shown that this can be a crucial factor in how long your home is on the market. Six months or so ago, average market time was almost 190 days, and now the average days-on-market time is down to 126 days (in Rancho Santa Fe). There are natural ebbs and flows in the market and choosing an agent who knows how and when to market in these time differences is crucial to getting a deal done rather quickly.
Lifestyle: I am not sure if other agents would have the same opinion, but I know personally through marketing a home in The Bridges country club in Rancho Santa Fe, that people in the luxury market are drawn to other things besides just the home. Most of the buyers that came to look at the home in The Bridges were either already Bridges members, or were very interested in the country club communities and amenities alike The Bridges. Depending on the home for sale, I think it’s SO important that your agent finds the unique amenities and features offered to prospective buyers of your home, and markets to those buyers over any others.
I hope this helps answer the “Why are houses in Rancho Santa Fe not selling?” question. I am very interested in the Rancho Santa Fe housing market, and am always researching and searching for better answers. If you have any questions or would like talk with me about these topics further, simply email me at email@example.com. I am always happy to help!