The Following Article is from the Sping 2012 Newsletter
In past years private sales were definitely the exception. With inventory dropping precipitously in North Santa Monica, and on the west side generally, private sales are becoming the new thing. A private sale is defined as a property that sells without coming on the public market and not being promoted through the multiple listing service.
Our new company, Partners Trust, had approximately $800,000,000 in sales in 2011. 40% of those sales were private sales! In North Santa Monica the number of homes that sold publicly in 2011 was 69. The number of private sales was nine, 14%. Pence-Hathorn-Silver was responsible for approximately 44% of those private sales in North Santa Monica. We were also responsible for approximately 25% of all sales north of Montana in 2011.
There are a number of reasons why there is an increasing number of private sales in the marketplace. The primary reason is lack of inventory. Close behind that is the vastly increasing number of buyers in the marketplace today. The number of buyers coming into the market is way outstripping the number of homes that are coming on the market for sale. The number of public sales in North Santa Monica, over the last eight years, has dropped from 179 to 69. This has created one of the top five strongest zip codes in the United States for the last 6-7 years.
Another growing phenomenon is all cash offers or offers without loan and appraisal contingencies. Roughly 70% of all offers I was involved in last year were all cash or no loan contingency offers.
Looking ahead, I see more of the same, fewer new listings, more buyers entering the marketplace, creating an even more competitive marketplace.