LOS ANGELES (Oct. 10) – Home prices throughout most of California will post modest declines next year while sales of existing homes will stabilize from the precipitous decrease experienced in 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) "2008 California Housing Market Forecast". .....“Geographically, more affordable regions such as the Central Valley and Inland Empire will experience greater softness in the resale market because of the large number of new homes coming onto the market in recent years,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Higher priced regions of the state, such as the San Francisco Bay Area and parts of San Diego, Los Angeles, and Orange counties will react more to affordability constraints.”
“By price-range, the highest-priced markets – those with medians over $1 million -- will show less stress,” she said. “The lower-priced markets will continue to face fallout from the subprime crisis, tighter underwriting standards, and competition from new home developments where price-cutting has been even more severe.”
In other words, the more desirable areas of Los Angeles, both on throughout the Westside, and in the more upscale areas of the San Fernando Valley including Sherman Oaks, Studio City, and Encino are likely to be mostly sheltered from significant price drops.
But here's the truth - this status of residential real estate varies on a micro as well as macro level. For example, in Culver City, a house just across the street from me in the cute little neighborhood of Sunkist Park had 4 offers on the table within 3 days of the first public open which took place this past Sunday, October 14th. The sellers countered all 4 offers, and accepted the buyer who stepped forward with an over full-price offer and strong terms - escrow opened within 4 days. Meanwhile, in the Crenshaw District, a property that we have with two houses on one lot, has been on the market for approximately 40 days now. We have had a steady - if slow - stream of agents previewing, neighbors lookylooing, and would-be buyers have submitted offers. In this neighborhood, there are dozens of homes sitting (languishing) on the market, with very little activity occuring. But a combination of old-fashioned and new-fangled methods on our Team's part including door knocking, flyers, MLS, weekly open houses, and web-blasting Listing Widget announcements to all agents in the area - have helped to bring buyers in. The issue is finding qualified buyers who can get through the current liquidity crunch and find a suitable loan product to get them into home ownership - but such loan products are out there once again. BofA and IndyMac offer "community" loans for teachers, firefighters, paramedics, parole and police officers and other public servants - with low rates and 100% financing. There are a variety of other decent loan products on the market as well, and a savvy lender who knows how to help clean up credit and procure the appropriate loan can get deals through.
So what to do? There are definitely more homes on the market and the irony is that a time when buyers should be out shopping and negotiating for great pricing and terms, buyers are sitting on the sidelines with a wait until the market drops further attitude. I can't keep count of how many people I have spoken to in the last 2 weeks who have responded to me that they are waiting until the market drops lower, and speak confidently that there will be even more property at even cheaper prices in 3, 4, 6 or 8 (take your pick) months.
Most of us really do have a herd mentality - we wait for the media to give the green light that things are on the upswing before we come out and buy -- but by then, the smart investors have come in, negotiated great deals and are already enjoying appreciation - while everyone else now chases an upticking market place. The testers, the initiators, the bold few -- they are out now shopping carefully and deliberately - writing offers and jumping on the ones that stick.
We are reviewing the numbers weekly in Sherman Oaks, West Hollywood, Studio City, Encino, and Culver City (among other areas) and we know what the market inventory is in each location.
If you are ready to buy, you can name your price range, style of home, # of bedrooms, bathrooms and other features - and we can send a list your way within 24 hours. We are helping others daily - but we are never too busy to serve you!
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