Overpricing a home is a common mistake among home sellers. This is a mistake that Governor Deval Patrick has also made, according to a column in Banker and Tradesman entitled: “Patrick’s Experertise in Politics, Not Real Estate”. The typo in the front page headline is Banker and Tradesman’s, a publication of the Warren Group. The Warren Group is a 140 organization that focuses on real estate related news and public records, but they do not actually market and sell property.
The column starts: “Who knows what Gov. Deval Patrick will do for his next act, but let’s just hope he steers clear of real estate!” The governor and his wife have been struggling to sell their home, along with many others in the commonwealth and across the nation. However, the Banker and Tradesman columnist accused the governor of being “all but ignorant” of the real estate market, of bad timing, and of delusion.
I know. Harsh.
The Patrick’s home in a Boston suburb of Milton in a desirable neighborhood known as the Columbines was most recently put back on the market a couple of weeks ago and the business publication took the opportunity to criticize the governor’s real estate sales expertise—an unfair criticism given the fact that he was smart enough to hire a REALTOR® who likely helped him along the way and, given the fact that he is in fact a politician, he is obviously not a real estate sales professional. This is to say nothing of the fact that most of the columns criticisms were baseless.
According to the listing sheet, the governor’s 1923 colonial boasts 6,880 square feet, 8 bedrooms, and 4.5 bathrooms. It is currently listed for $1.5 million, but Governor Patrick and his wife initially put it on the market for $1.925 million in June 2009 and reduced the price $200K four months later in October to $1.725 million. The Patrick’s then took their home off the market the very next month for the winter, and then put it back on in April only to take it back off the market the following winter. It is this history that Banker and Tradesman was critical of and drew the conclusion, without knowing the details, that the governor doesn’t know what he is doing because of when he tried to sell, the list price, and the time it has taken so far.
However, a closer examination of the market history and the Milton real estate market demonstrates that none of these accusations are true. To say that the governor’s home was over priced is to say that all comparable homes for sale in Milton are overpriced. It’s not fair to pick on the the Democrat just because he is the governor…or a Democrat.
Only two properties sold for over $1.5 million in Milton when the governor initially had his house on the market. One home sold for $1.6 million and another for $1.715 million. The $1.6 million sale was a 6,644 square feet, 9 bedroom, 5.5 bath home and the $1.715 million dollar sale was nearly 11,000 square feet, 9 bedroom, 6 full bath, 2 half-bath home. And, guess what? Both of these homes were listed by the Patrick’s real estate agent and also initially priced at between $1.92 million and $2.3 million, the latter of which hit the market in 2008. So it stands to reason that the agent appropriately advised her client to reduce the price, and he did. Both homes were built in the early 20th century and sat on larger lots, as well.
When I searched properties that sold for over $1,000,000 during the Patrick’s initial listing period, only five properties sold. The three others also had 2,000 less square feet.
Further, the author criticized the Patrick’s for taking their home off the market and putting it back on just before the home buyer tax credit expired in 2010. The tax credit was for $8,000 for first-time home buyers and $6,500 for those who are simply buying another home. It is unlikely that anyone spending over $1 million on a home would be a first-time home buyer and it is equally unlikely that someone in that price range would be affected by the expiration of a $6,500 tax credit.
All homes sell quicker at lower prices, but that doesn’t necessarily mean that all home owners need to accept lower prices. The market isn’t just determined by what a buyer is willing to pay; it is also determined by what a seller is willing to accept. Granted, it is a buyer’s market, but higher end sellers don’t get where they are by being impatient. Owners of million dollar plus properties in Milton are simply waiting it out until they decide not to. Another possibility is that they were waiting out the presidential election or the fiscal cliff negotiations.
People choose to sell their home for different reasons. Sure, the Patricks decided to sell their home during a less-than-optimal time period, but so did many others. I also don’t think that this was part of his overall strategy as the article implies. It’s not like the governor said to Diane, “The economy is tanking and real estate sales are down, let’s sell our home now.”
The Patricks may have initially been priced too high, but it is clear that it wasn’t Patrick who picked the price. What is more, the Patrick’s have been responding to the market with aggressive price reductions. Further, a lack of comparisons available prior to the Patrick’s June 2009 initial list date may have contributed to the high starting price, but you have to start somewhere and his agent started where similar properties started. According to MLSPIN data, only 1 property sold for over $1 million in the 6 months prior to when the governor’s home hit the market. The agent may have went back a year to arrive at the $1.9 million starting price. Their time-frame may have also had something to do with it and Gov. Patrick’s REALTOR may have been working to get them them as much as possible for their home. The current $1.5 million price tag also seems consistent with recent sales in Milton.
The Banker & Tradesman column may have been correct regarding the pitfalls of overpricing, but the marketing of the governor’s home was a bad example of such pitfalls.
The bottom line is Banker and Tradesman is correct regarding the dangers overpricing a home, but wrong for picking on the governor for doing so. He priced his home based on the information available at the time. As the information changed, the Patrick’s reduced their price. Regardless, Banker and Tradesman is wrong to assume that the governor doesn’t know what he was doing as he tries to sell his home.
Instead of criticizing the governor for his and his REALTOR’s marketing strategy, perhaps Banker and Tradesman should focus on their own “experertise”.