What is happening in the Glendale Real Estate market?
Here is the reader’s digest version. Our inventory levels are still falling, but not as fast. Homes are selling nearly as fast as we can list them, median price has risen dramatically, but price per sq foot is trending pretty steady.
Just tell me if my home is worth more!
Ah, for that, my impatient reader, we must dive into the numbers!
The number of homes for sale has been falling for over a year. We started a dramatic drop last fall, shedding nearly 50% of our inventory of single family homes from October 2012 to February 2013.
Our number of open escrows dropped, during this time, as buyers were unable to find homes to buy, but in February open escrows soared. In fact, we have just 1.5 months worth on inventory. 4 – 6 months of inventory is considered “normal”. Unless we see a dramatic increase in new listings, March is going to be a stressful time for buyers.
Supply is down, demand is up- where are prices?
Median price has been rising since December, 9.3% in February alone. Average price also took a leap, rising 15.9% in February. Average price per square foot is less clear that values have risen, overall. In February this number rose 4.2% over last month, but, since October, the average price per square foot has remained about the same.
What does that mean to ME?
In order to understand price trends we need to look at the market in segments. Afterall, common sense tells us the luxury market is different from the first time buyer market, right?
I sliced our market into quarters-
- Below $500,000,
- $500,000 – $750,000,
- $750,000 – 1 Million
- Above 1 Million
The most stable quartile is $500,000 – $750,000. This is where the action is, over half of the homes sold in both January and February are in this segment. Price per square foot in this segment rose this month to $347/SF from $340/SF.
The big surprise was the lowest priced quartile. The number of sales dropped by 50% while the price per square foot shot up from $299/SF to $351/SF. A drop in sales combined with a rise in price means there is hot competition for a very few homes and the prices are being bid up.
While the lowest segment dropped in volume, the $750,000 – 1 million segment (the move up buyer) doubled from just 10% of the sales in January to 24% of the sales in February. Average price per square foot also rose dramatically, from $274/SF to $333/SF.
What will happen in Spring?
Competition will continue to be fierce in the lowest price segment. These homeowners are the hardest hit in terms of being underwater on their mortgage. Many of those who would like to sell are working on loan modifications or hanging on in hopes that prices will rise enough that they can sell. At the same time first time buyers and investors are duking it out with each other for a very small piece of the inventory pie.
The $500,000 – $750,000 range will also be tight for potential buyers. Demand and supply in this range are nearly equal, and neither buyer nor seller will feel like they are in control.
I predict the inventory for the $750,000 – 1 Million will rise. The homeowners in this range generally have the most equity and, therefore, the most mobility. Many who put off normal life moves due to low prices will start to act on the improving market.
What Should I do?
If you are a buyer it is CRITICAL that you have a solid business proposal for the seller of the home you desire. If you are not properly educated and prepared, one of two things will happen- you will pay way over your budget in a fit of competition or you will not buy a home. The only way to buy sensibly in this market is to have a plan!
If you are a potential seller…. what are you waiting for? The conditions could not be better for selling! If you are worried about where you will GO, we should talk. I can help you create a plan that will get you what you want.