In the 90402 zip code there have been 67 total single-family home sales from January 2013 to August 20th 2013, compared to 68 total sales also in the same period of last year.
Our company, Partners Trust, proudly represented 27% 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, decreasing inventory and bidding wars for most low end / land value properties.
The following is the breakdown year-to-date:
Overall, single family homes in 90402 have seen a 29.41% rise in the median sales price from the 1st half of 2012, to the 1st half of 2013, from $2,507,500 in 2012 to $3,245,000 in 2013, respectively.
The North of Montana market has outpaced Malibu, Pacific Palisades and Brentwood by way of erasing all the losses of the recession and in the case of land value properties, reaching all-time highs.
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 interest rate shifts have negatively affected some buyers, causing some to opt out of the market altogether. 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 suddenly 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 still relatively 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 off a bit. 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: 5 sales
2-3 million: 23 sales
3-4 million: 19 sales
4-5 million: 9 sales
5-12 million: 11 sales
The record high price year-to-date is $11,500,000 on San Vicente Blvd.