Reduced price of $13 million California villa in weekly increments of $250,000 during unique auction, waits for a buyer to seal the deal.
Dutch auctions, a pricing method where the price drops incrementally until a buyer accepts, have a rich history dating back to 17th-century Holland and tulip markets. In the La Jolla real estate market, this strategy has been recently employed to stimulate buyer interest amid a softened and somewhat stagnant market.
For instance, a $13 million estate in La Jolla's Muirlands community is currently listed using a Dutch auction format. The price of the property drops by $250,000 each week until a buyer is found, creating a sense of urgency and competition among potential buyers. This approach can lead to quicker sales by motivating buyers to act before further price reductions.
The auction's rarity in the local market generates heightened visibility and curiosity around the property. While Dutch auctions are not the traditional method for real estate sales in California or specifically in La Jolla, their recent application here aims to address market hesitations and a slowdown in buyer activity by offering a transparent and time-limited pricing approach.
The home at 6389 Castejon Drive, listed by Heather Daum of The Agency alongside Mauricio Umansky, is an "extraordinary coastal retreat" with over 11,000 square feet of living space. The modern home boasts six bedrooms, seven full bathrooms, two half baths, and a kitchen on every level. The reverse floor plan optimizes ocean views, according to the firm.
The main level includes an indoor bar, a 180-bottle wine room, and a lounge area that flows into a courtyard with a cascading water feature. The second level features formal living and dining areas, which open to an infinity-edge pool, outdoor kitchen and bar area, basketball and bocce courts. The property is located on a half-acre lot with views of the Mission Beach and La Jolla coastline.
The Dutch auction strategy offers strategic advantages, including increased visibility, curiosity among potential buyers, a competitive atmosphere, and potential for faster sales. It can be a practical solution for owners under time pressure due to factors like job relocation, divorce, or financial pressure.
Another Dutch auction is currently underway for a $12.985 million estate in La Jolla. The property is in proximity to golf courses, beaches, hiking trails, a school, and restaurants. Dutch auctions might represent an innovative niche tactic to aid property sales in challenging market conditions.
As the market adapts to this pricing method, the full effectiveness of Dutch auctions in La Jolla is still emerging. However, their longstanding success in other fields, such as flower and commodity markets, suggests they could be a valuable tool for La Jolla real estate agents and homeowners alike.
[1] Daum, Heather. Personal interview. 18 May 2023. [3] The Agency. (2023). 6389 Castejon Drive, La Jolla, CA 92037. [Online]. Available: https://theagencysandiego.com/property/6389-castejon-drive-la-jolla-ca-92037/ [Accessed 18 May 2023].
- Unconventional real-estate strategies, such as Dutch auctions, are being employed in the La Jolla housing market to stimulate buyer interest and potentially accelerate sales, as seen in the listing of the $13 million estate at 6389 Castejon Drive.
- The innovative use of Dutch auctions, like the one for the $12.985 million estate, could be a niche tactic to aid property sales during challenging market conditions, offering increased visibility, curiosity, competition, and the potential for faster sales.
- As La Jolla realtors and homeowners explore different methods to adapt to changing market conditions, the long-standing success of Dutch auctions in other fields, like flower and commodity markets, may provide a valuable tool for navigating the local real estate landscape.
