Marie Brown, Other/Just Looking in 47807

I am interested in buying a home in the Preston Hollow area of N Dallas. The stats say the median sales price

Asked by Marie Brown, 47807 Mon Jan 14, 2008

in that neighborhood is down 26.8%. I have been following hosing prices there since last May. In making an offer on a house that today has the same list price as last summer, would a legitimate offer be one minus that 26.8%? How would you recommend I approach making my offers?

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First, factually in the period 6/1/2006 to 6/1/2007 there were 184 homes sold in the market area loosely called "Preston Hollow" with an average list price of $639k sold for an average of $613k or $217 per square foot on average. The highest sales price was $6M, the lowest $69k.
I say 'loosely' because there doesn't seem to be an official boundary for the area and anybody trying to sell in North Dallas might call his house as being in Preston Hollow. Originally, the town of Preston Hollow started around the corner of Preston and Northwest where Ebby has her cute little office and went north and west from there plus a little to the south and east to the Highland Park limit.
Now, many people refer to the area between 75 and Preston as Preston Hollow, and it does contain Preston Hollow Park. But, how far north can you go and still be in Preston Hollow? To LBJ? To Forest? Well, there are some very nice homes and estates in that northern area we usually refer to as North Dallas, but are they really Preston Hollow?
Only you know the address of the property you are considering and whether it will be near Geo Bush when he retires. Continuing with our story...
In the period 6/1/2007 to 6/1/2008 there were 149 homes sold in the same market area loosely called "Preston Hollow" with an average list price of $686k sold for an average of $661k or $230 per square foot on average.
Year over year, the prices increased by 7.8% on average. The selling price compared to listing price firmed up from 95.9% to 96.4%, which indicates solid demand even with the price increase of nearly 8%. The median price jumped from $485k to $545k across the same two years.
Second, to answer your question about how to take into account an apparent drop in values, while each property has to be evaluated individually and the situation on that property evaluated from the seller's perspective, you could just apply the 73.2% factor to the current value, not the listing price. For example, if prices dropped generally by 10%, you could take the current tax-appraised value and knock off the 10% and argue with the seller that prices have dropped by that amount. You will, of course, get push-back saying that the property was renovated or is not part of that market or some other arguably sound reason for not agreeing with your offer.
Cyndie's point is valid, too, that in a particular price range hypothetically the prices might be rising more rapidly or dropping in one price band while rising in another price band.
Unfortunately, the above-$500k homes went from $1.022M avg to $1.025M ($249 vs $258 /sf) in the same periods. So, the total prices didn't rise much on the 80-odd homes, but the price per square foot did.
So, without knowing much about the particular property in question, it would be difficult to give you a strategy because it would be against market statistics. Like Bruce says, You could try just saying the market is down and it is a good offer!
Web Reference: http://recenter.tamu.edu
1 vote Thank Flag Link Tue Jun 24, 2008
Marie, There is unfotunately no specific formula that you can use as a rule of thumb on how much you can deduct when making an offer. It always is on a case-by-case basis. Preston Hollow is still one of the highly desirable areas of Dallas. I would recommend having a market analysis done (this is a mini-appraisal) usually done by your Realtor or if you don't have one, I will be happy to prepare one.

This market analysis is based on the condition, the amenities the house offers or lacks, the location within Preston Hollow etc. Once we know what the house is worth, then you decide how much it's worth to you and make an offer accordingly.

Naima
214-289-8555
naima@sumner-realty.com
Web Reference: http://www.sumnerrealty.com
1 vote Thank Flag Link Mon Jan 14, 2008
Hey Marie, I would suggest having a agent run a CMA to find out what homes have sold in that area and get a fair market value. if you need access to the MLS, have questions or need further information please contact me at (817)781-9052 or email me at RyanHardinRealty@Gmail.com. Also if you want to search the MLS for active listings visit my website at Ryan.JPHomesForSale.com


Thanks Ryan Hardin @ JP & Associates Realtors
0 votes Thank Flag Link Mon Jan 26, 2015
When making an offer several things must be taking into consideration. The 26.8 % that you refer to is an average so in some cases you will be very well served by making and offer 26.8% lower than last years prices but what about if the house has foundations problems, A/C does not work, Heating not in good repair, roof leaking ....so for and so on. Sometimes you should be making an offer for less than the average price for the neighborhood. Many times prospective buyers do not realize that your loan is one of the most important decisions that you will make. I am a volunteer for a non-profit organization that offers Zero Down loans, Zero Closing fees and their interest rate as of today is 3.675%. My experience says we need to concentrate in everything that has to do with the purchase of your home, after all is the single most important decision you will ever make.
If you need help and you are a first time buyer call me with out any obligation Joe Vargas (469) 475-9145
0 votes Thank Flag Link Mon Jan 19, 2015
Marie,

My friends bought an excellent deal there for a little under value. I would approach making an offer by being careful to not insult the seller, it depends on condition, location in Preston Hollow and Price. The strategy I use to formulate offers actually results in lower purchase price for buyers versus low balling and not winning the house, or paying higher. Some people use public websites which show the properties sold for certain prices. As a Realtor, I don't charge a fee to my buyer's it is all paid for in the price of the home by the seller, and I always save my clients thousands more dollars than I earn for my services. Of the homes I show in Preston Hollow, I am not showing the same statistics and would be happy to talk with you and share with you about how to win making an offer in Preston Hollow.
0 votes Thank Flag Link Sun Mar 29, 2009
Marie,
You might want to search the MLS for active listings in Preston Hollow. This will show you homes currently listed for sale.

If you find a specific home you are interested in then I would suggest getting a CMA report. This report will show you homes that have recently sold, along with those currently listed.

From the CMA reports you will be able to determine the fair market value.

You can access the MLS, and request CMA reports at no cost using my web site, and others.

Regards,
0 votes Thank Flag Link Wed Jun 25, 2008
Statistics can be deceiving. Included in those numbers are tear down houses, million dollar mansions, homes in the $500K price range and redone homes in the $800K price range. You cannot use the same rule of thumb with all of these different type homes.
Your best bet is a good realtor who knows the area. Have them run comparable sales for you of similar homes in the subdivision or near area to determine the percentage below list price that that home might likely sell for.
0 votes Thank Flag Link Mon Jun 23, 2008
Marie,
I live and work in Preston Hollow and the area stretches from Northwest Hwy to Forest Lane. There are a wide variety of homes in this area as the other agents have mentioned. But I truly can't imagine a home in this area selling at 26% of the asking price. Prices in Preston Hollow were up slightly in 2007. They range from $200,000 townhomes to $45million dollar mansions. You can conduct an MLS search or check a the stats a my web site LydiaPlayer.com
Good idea to really get an idea of the neighborhoods in and around Preston Hollow before you get serious about buying.
Web Reference: http://LydiaPlayerBlog.com
0 votes Thank Flag Link Fri Jan 18, 2008
I agree that you should have a CMA (Comparative Market Analysis) done for the neighborhood the home is in. Where are you getting your stats? There can be many sources of information-make sure yours is accurate. In November 2007, homes in North Dallas sold at an average of 92% of their asking price-so offering 26-27% below asking price most likely won't be the answer. You need to measure what the home you want has to offer vs what the homes that have sold had to offer-and how badly do you want it? There are several factors to consider when making an offer. You should weigh them all in making the decision.
Web Reference: http://www.MarciaLevine.com
0 votes Thank Flag Link Tue Jan 15, 2008
There are a variety of sales prices in that area. Some of the houses are 50 years old and need total rehab. Some are 50 years old and rehabed, some have huge lots, some don't. Some are new and never lived in so you just have to take a look at the market and see what's selling. My guess is that if you offer 26.8% under list you won't get a response in most cases, but each situation is unique. I think you always have to be careful with stats too. Median price may be down, but I'll guess average price is up. I think the last numbers I saw was that sales prices in Preston Hollow were up about 20% over the past year.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Jan 15, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Please remember that the seller of whatever property you are looking at, most likely will need to net a certain amount unless they are desperate to sell.
0 votes Thank Flag Link Mon Jan 14, 2008
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