While many areas of the country have been hard hit with the sub-prime fallout, the Los Angeles West Side has weathered the storm rather well. For those who continue to buy homes, it is a buyers market in Los Angeles. Does this mean the sky is falling for sellers? No. It means a reality check on how much your property is really worth. For Los Angeles, many of the pricing woes that were created were due to a lack of inventory and media hype. Homes that may have difficult locations, awkward layouts, and lack of amenities were going for very near asking prices of similar premium properties. You could say the valuation spread was very thin.
From January through June, the Los Angeles West Side continued to show price appreciation. This would be most clearly demonstrated by observing who was buying: the wealthy, upper middle class, and patient buyers. This ended with September’s numbers when we did observe a decrease in the median sales price. And still, most of the hot properties are still going in multiple offers. How? Think of it as a cherry tree. The best cherries grow on top and the worst cherries on the bottom. For a period of time, sellers were saying that the cherries at the bottom were worth almost the same as the ones at the top. No more. The cherry tree is growing, and with more cherries to pick from, the ones at the bottom must adjust to get looked at.
But multiple offers? How could that be? Multiple offers situations are generated by value and price. Very simple. A great property in a great location at a great price will sell faster than the competition in any market. Buyers are shopping right now and know value when they see it. They are looking for it intentionally. The better the deal, the more buyers will look at your property, and the faster it will sell.