The FEBRUARY Luxury Real Estate Panel A panel of our PREMIER luxury San Diego Real Estate professionals answer the question, What makes comps in the luxury market a more complex issue?
The Luxury Panel is a rotating group of San Diego’s top Real Estate professionals who specialize in the luxury market sharing their expertise on hot topics and home buyer & seller questions.
Question: How are comps in the luxury market more complicated than in other markets?
“Any strict reliance on ‘comps’ in the luxury market is problematic and in most cases flawed. No two truly custom properties which comprise the high-end share the same amenities, floor plans, square footage, acreage, finishes, views, age and curb appeal. A seasoned and savvy Realtor in the luxury market needs to thoroughly understand this reality then extensively perform and present research accordingly to validate their suggested purchase price.”
“Pricing and comps have become more of an art form than a science in today’s luxury market. Limited inventory means limited comps so agents need to be creative to ascertain value. There are many intangibles to consider: upgrades, architectural significance, quality of finishes and location. Without the knowledge and experience of the marketplace pricing accurately is difficult.”
Richard Combs ~ Hunter & Maddox Int’l
“La Jolla is a community of custom built homes, so pricing is a challenge. First we look at what has sold and how they differ from our targeted property, next we take into account the value of the lot, neighborhood, square footage, finishes and amenities. Finally, we figure out what the replacement cost of the home would be. Appraisers use a similar formula, so when our listing sells, we are able to substantiate our pricing.”
Linda Daniels ~ Willis Allen Real Estate
“Comps in the luxury market are quite difficult in the area I service due to the fact the estates I represent entail acreage, some with groves and /or vineyards or equestrian facilities. The residences are generally custom built or semi- custom. One REALLY has to look at REAL comparative properties in the whole area of where they are working in this scenario.”