NOTHING was selling, now EVERYTHING is selling…what a difference a month makes. The inventory in Santa Monica from April-October 2006 grew quickly while discretionary buyers sat on the sidelines. The increasing inventory peaked in October and began easing in November. In January this year buyers that needed to buy came back into the market with the expectation there would be a steady increase in new homes coming on the market. It hasn’t happened…new inventory has been very low coming on the market. Some weeks, in different Westside neighborhoods there were NO new listings for agents to preview on Tuesday. This started causing frustration with the buyers that needed to buy and they started buying homes that had been on the market for extended periods of time.
The last weeks of February and the first weeks of March frenzy started….people were back….multiple offers became the norm again. Buyers grew tired of waiting for new inventory. They began purchasing whatever they could find that reasonably fit their criteria. At the time, Pence-Hathorn-Silver had 12 listings in Santa Monica, Brentwood and the Palisades and within three weeks they were all sold.
Another phenomenon in this marketplace is the large number of private sales that are taking place. This is particularly noticeable in the new housing market. In past years the builders were insistent on waiting until their projects were completed and staged before letting anyone preview. Last year, because of market conditions, some builders decided to offer buyers the opportunity to purchase their homes during construction which allow for some customization by the buyers. With this change in marketing strategy 60-70% of all new homes are now selling before they are completed and new construction prices have been outpacing the market.
Another major change in the market is the large number of homes selling as pocket listings or through direct offer contact. Some homeowners who are thinking about selling and speak with an agent are selling direct to a buyer represented by that agent or an agent in their office. Other homeowners are responding to written offers accompanied by a check, submitted directly to them by an interested buyer or their agent. All told, 25-30% of the sales currently happening are unlisted properties.
While many areas in the country and some inCaliforniahave been suffering a flat or downwardly trending market, the Westside of Los Angeles is still strong. Our market continues to have more buyers than sellers which continues to create a balanced or a slight seller’s advantaged marketplace. The market conditions cycle between these two positions depending on the time of year. Spring time and early summer we experience a seller advantaged market and latter summer through the holidays we have a flat to balanced market. In 2006 the average time on the market was 44 days in Santa Monica, 55 days in Brentwood and 54 days in the Pacific Palisades which is an indication that our Westside market is still strong if not robust at times.
I think 2007 will be a mirror of 2006. We will have a strong market through April and maybe into May but a softer market during the summer and early fall. If you want to be a seller this year call us right away for a marketing consultation and value analysis.