If you’ve been looking for a house on the Westside any time over the past 6 months, you know that prices keep going up. The California Association of Realtors figures show that over 60% of all sales are coming out of multiple offers, which means that people are competing for homes.
“What happened to the crash in home prices that now seems like a distant memory?” you may ask. Well, it seems like buyers and sellers have fallen into the perfect conditions for a Seller’s Market: Inventory (homes for sale) has been at an incredible low level for roughly the past 6 months. As more buyers come off the sidelines with greater confidence in the market, they are willing to pay more — which they can do because of the (still) historically low interest rates.
The result is an “auction atmosphere” similar to what we had going on in 2007, and prices are going up at a steep climb.
All of that said, you may be wondering what I mean when I say “prices might not be as high as we think they are.” Here’s the deal — because of the very low number of homes, we are dealing with significantly small samples. And with a small sample, one or two big sales can skew the average prices upwards quite dramatically. This is why it is important to segment price-points when you are looking at areas; instead of taking an average of all the homes in Cheviot Hills or Mar Vista, we need to look at “3 bed, 1 bath” homes as a group, or “1,700-1,900 square foot” homes as another striation. In some markets, the price increases will be dramatic no matter what (e.g.: Santa Monica’s Sunset Park), but in other areas, like Rancho Park and Southern Westwood, the increases are more modest when comparing similarly situated homes.
If you’re a Seller, I don’t know when market conditions could get any better to be a seller to get the price you are looking for.
If you’re a Buyer, current interest rates bring the price of the purchase down to a tame monthly cost.
Whether it’s a good time for you to be a buyer or a seller will be dependent on your individual situation. Give me a call if you’d like to see how you fit into the current market place.