In the 90402 zip code (North of Montana Ave), there have only been 34 total single-family home sales from January 2013 to the end of May, compared to 75 total sales in the second half of last year. Last October, I accurately predicted that December would be one of the busiest Decembers in the previous years.
There were: 22 sales in December 2012, which is more than half the number of sales for the last 6 months (January 2013 to the end of May 2013).
Our company, Partners Trust, proudly represented 24% of all homes listed and sold in 90402, the highest market share, of any brokerage.
2013 will prove to be the strongest seller’s market of the past 10 years with shorter days on market, increasing sales prices, and bidding wars for properties.
The following is the breakdown for the first half of this year:
Not surprising is that 6 of the 34 total sales were “off market” private sales. 2013 PRIVATE SALES totaled 6 (3 in the flats North of Montana) with an average price of 2.6 million.
Overall, single family homes in 90402 have seen an 11% rise from the 2nd half of 2012, and a 30% rise compared to 2011. The number of single family home sales has dropped significantly to less than half the number of the previous six months. Consequently, due to the lower total volume of inventory sold, the median sales price saw a decrease to $3,187,500 compared to the 2nd half of last year which was $3,465,911. To give you an idea of how much the market has changed, the 2011 median was $2,693,889, and 2010 had an average of $2,441,703.
The overall market today is still weighted with buyers, a number of which are cash investors; but the most motivated buyers are “end users”, some with cash some needing mortgages, seeking a property to live in and enjoy – not fix-up and flip back on the market right away.
The dramatic rise in interest rates has negatively affected some buyers, causing some to opt out of the market all together. This interest rate fluctuation has been long expected, but is somewhat shocking to buyers seeking loans. Some buyers, who are not protected by rate locks on their loans, are seeking lower purchase prices as the monthly mortgage amounts are rising.
Here is what to expect based on what we know today:
- Some desperation among buyers not wanting to miss the opportunity of relative low rates.
- More sellers coming to market while there are still qualified buyers available in their price range.
- Less favorable interest rates for refinancing will cause lenders to compete for purchase transactions.
- The meteoric rise in prices will cool a bit as the 2nd half of each year is usually a bit slower than the 1st. This, coupled with month over month increases that are unsustainable for long periods of time will likely create more inventory for buyers to choose from in the 4th quarter.
In many instances, multiple offer bidding wars continue to push the sales prices above the list prices, especially in the 3 million and under market. With the staggering shrinkage of inventory in 90402, we are seeing most properties for sale enter into escrow within days of hitting the market, but only if the list price is within 1-2% of comparable recent closings and nearly 100% of the time if the property is priced a bit below market value.
Our micro market was on a front page article in the Sunday LA Times recently regarding pocket listings. The focus is on various methods buyers are using to acquire a home in today’s low inventory and multiple bidder market. To quote another LA Times article, “Rising Mortgage interest rates also remain a wild card. A surge in rates- which have jumped 1 percentage point from their recent bottom – can get certain buyers off the fence and create short-term demand for housing, pushing up prices further, but they will also undoubtedly push out many shoppers who can no longer afford homeownership.”
Buyers recognize prices have been increasing but this is not deterring them. Aggressive buyer strategies include waiving inspection and loan contingencies, shortening escrows, and offering Seller “lease-backs” so that the seller has ample time to find a replacement home. We see this in most price-points, especially the 2-4 million dollar range. The following is the breakdown of sales:
1-2 million: 3 sales
2-3 million: 11 sales
3-4 million: 9 sales
4-5 million: 4 sales
5-10 million: 6 sales
The record high price for the 1st half is $11,225,000 on La Mesa.
New Listings this Week
478 21st Pl – 6bd + 10.5ba. $6,200,000. Apx. 7,500 sq. ft. tri-level Italian villa. Extra-large finished basement. Impeccable details throughout. Gourmet kitchen, luxurious master and master bath, 3 story elevator, oak hardwood floors, and more. Last sold in November 2008 for $5,500,000.
476 21st St. – 5bd + 4.5ba. $3,550,000. Large corner lot apx. 8,947 sq. ft. 1927 Spanish home with old world charm and beautiful landscaping. Last sold in May 1985.
415 14th St. – 4bd + 3.5ba. $3,400,000. Single level designer home. Bright with high ceilings, large great room, exceptional master. Private back yard w/mature trees. Last sold in September 2012 for $1,900,000.
No New Sales this Week
Closed Deals this Week
653 Palisades Beach Rd. – 6bd + 4.5ba. $5,550,000. Sold in 17 days, $505,000 over asking price!
Pence Hathorn Silver Active Properties:
544 Euclid St. – 5bd + 5.5ba – $4,795,000
465 25th St. – 5bd + 5.5ba – $4,195,000 or $22,000/MONTH
168 S. Medio – 5bd + 3.5ba – $3,988,000
838 17th St #102 – 2bd + 2.5ba – $1,549,000
2950 Neilson Way #410 – 2bd + 2ba – $1,150,000
Search for more homes, see real time analytics and learn about the North Santa Monica / North of Montana Ave. community on our North of Montana blog. Add your comments (scroll down to the “Add Your Comment” section) and read other blogs. And please call my mobile phone (310) 924-4014 with any questions.