Journalism won’t die if you donate. Support Voice of San Diego today!
I get this question a lot — why do San Diegans list their homes with a price range, like “will entertain offers between $529,000 and $579,000”? Why would anyone offer more than the bottom of the range?
I’ve heard a few different explanations from my sources. One idea is that a range will make the house pop up in a variety of price-limit queries in the homes-for-sale database.
The New York Times targeted the price range concept this weekend, calling the quirk a local phenomenon in San Diego.
Variable pricing, also known as “value-range marketing” or “range pricing,” has gained popularity in the San Diego area over the last decade, becoming an established peculiarity of the region’s real estate market.
The number of homes marketed with a range in San Diego County has steadily grown since it was introduced in 1995. There were only 12 value-range sales in 1996. Today range-priced listings make up 50 percent of all sales in San Diego County, with 15,335 properties sold with range pricing last year out of a total of 30,831 sales, according to Ray Ewing, the president and chief executive of Sandicor, a regional multiple listing service.
Though range pricing has been used in a few other states, San Diego tops the charts, according to the Times. Ewing, from Sandicor, identified the trend as crucial in Southern California, where a range of property types (subdivisions next to older properties, for example) makes pinpointing a value difficult. Listing a range gives buyers a starting place for bidding, the brokers interviewed for the story said.
And, as with any real estate trend, it shifts in today’s market conditions:
Victoria Crown, a broker …, said that when the market was rising, agents used value-range pricing more than they do now. “I think that is part of the reason the market moved up here, personally,” she said. “On the flip side, as the market is moving down, some agents use it as a crutch because they don’t really know where the price is.”