Although some properties are not selling within 10 days, many Silicon Valley homes listed for sale do go pending a week to ten days later with multiple offers. Of those which sell quickly, pending sale prices are often far above the list price; we are seeing 10% overbids often, and sometimes 25% or more, in select cases.
Unfortunately, Bay Area many home buyers’ expectations have not yet caught up to the reality of the overheated market and are shocked that a great “full price offer” may well be the worst of the contracts presented.
What’s causing this to happen?
First, there’s a very dire shortage of homes to buy. That can create a buying frenzy all by itself in an area where people are well employed and want to put down roots.
Second, the listed prices are placed strategically low to attract multiple offers. If you were to look at the list price as opposed to the comps’ sale prices, you’d see that homes are not listed where they should sell, but often about 5% below that amount in many cases (sometimes more than 10% lower, though).
It is extremely important to realize that the list price may have little to do with the eventual purchase price. Study the comps and then assume a trajectory. If homes are going up at the rate of $10,000 per month for the type of home you like, then when you bid, consider the sale price 30 days out – or more – and then you may hit the target.