If you haven’t been to an open house or brokers open lately in Los Angeles, you may be surprised to see what’s happening. The houses are full of buyers. Without the distraction of an election, prices have contracted in most areas, summer job transfers happening, and New Years resolutions to be filled; people are looking to move.
Reviewing the Los Angeles Westside, it is clear that the buyers are first time and upgrade buyers many of which are families. For the first time buyers, prices in combination with low interest rates have made the current market affordable. The properties that are really moving are single family homes in the price range of $400 – $800,000 with $800,000 – $1,000,000 still moving. In the most desirable locations, some houses are on average seeing 5 – 10 offers. Here is the key, the houses that are receiving the multiple offers are under priced allowing the market to decide their value. Great homes in great locations are selling. Examples of this are evident everywhere. In the Melrose area in Fairfax district, there were only a few sales in March while there are over 20 homes pending in April, many with several offers.
The challenge for sellers in this market is not to be greedy. Many of the homes that go into escrow were at or below market. Those that are over priced, buyers are overlooking right now. The sellers that listen to their agent, and allow the market to work are being rewarded. The others lag on the market until the pricing moves to the buyers liking and do not receive multiple offers. When looking at your home and where to price it, an important question to ask is, “who is my buyer?” “Who would buy this house?” Be realistic. If you think that an all cash buyer is going to come in and buy your home on an alley that has no upgrades located on a busy street that is over-priced by 10%, it would be wise to reconsider your pricing. Also, avoid online pricing quotes from companies like Zillow. These software programs have the tendency to be off on their pricing by as much as 10%. Real estate, especially in Los Angeles, is a hypersensitive micro market. Only a good agent can really give you an accurate analysis of your property. Avoid agents that tell you what you want to hear to take the listing. If it is not backed up with numbers from the current market, move on. The market is moving, don’t be left behind. Currently, 30 – 50% of homes that don’t sell with an expired contract are back on the market priced to high to attract buyers. Be aggressive.
Buyers are facing their own challenges as well. They are discovering that the great deal they find online will more than likely not be the sales price. Who are the buyers out there buying currently? Many are renters leaving the rental market place. The cost of renting an apartment or house increased to the point where it is cheaper to own, and qualified renters are buying. Families are also moving, many of whom are having more children and are looking for more space. Finally, parents whom are wanting to put their kids into a good school without paying for a private school. It is more cost effective as private schooling in Los Angeles can grow into tens of thousands of dollars per year. Many of the current buyers have been on the sideline for several years waiting for their opportunity, and the time has come.
It is important to stress the importance of using a good agent. Good agents know the market, know the areas, and know the financing do’s and don’ts to make a purchase or sale effective. Agents will know when to turn loose “lowball Larry” and when to negotiate. This is one of the most prized and expensive purchases and sales in your life, get help.