How’s the Real Estate Market?
How is the residential real estate market in La Canada, Ca? Are prices up? Down? Are we going to “you know where” in a handbasket or is the economy turning around and happy days will soon be here?
If you are a regular reader you will remember that last month we were feeling pretty darn smug about the strength of the La Canada market. Our prices were up, we had more and better homes to sell, and our buyers had more cash than anyone else. Nah, Nah, Nah, everybody else. We were smokin’.
That was so last month.
This month were are singing a slightly different song. Median prices are down, (about 7.5%) though we are still doing better than our neighbors in Glendale and La Crescenta. A little more disturbing, perhaps, is that our average price per square foot is also down, (9.6%) indicating there may be a general, ever so slight, softening of prices. Ever so slight, I emphasize, because I have to tell you- my buyers have been in a shootin’ match on every house they want to buy.
There are fewer homes selling
I think this is a more important number. Both the number of homes closing escrow and the homes entering into contract are way down, 43.5% and 36.4%, respectively.
Why is this?
Financing. It is a lot harder to get thee banks to make the loans- at least within the contract time periods. At our prices- with loans often above one million, financing is harder to accomplish. Harder, but not impossible. Hoops must be jumped through, and all manner of stupidity from the banks must be tolerated. My “boots on the ground” experience says that these homes will close escrow, eventually. It will take longer.
The funny thing, is, that in most of the shootin’ matches I’ve been involved in, there are one, or more, all cash buyers! There is a tremendous amont of money floating around our town (no real surprise, there) but the money is looking for a deal. The deals are getting scarce, so when one pops up, BAM! multiple offers.
And, word to the wise seller, each of these homes was in absolutely move in condition.
Inventory is up
I think the last 3 months of near frenetic activity in La Canada has made some sellers a bit cocky with the prices. The months supply inventory is up to 4.6 months, far outstripping our neighbor’s amount of inventory. We are nearly double last month’s supply of inventory. Remember, 6 months indicates a “normal” market. If you factor in the influence from the shadow market, a 6 months supply would surely spell a very slow market in La Canada.
A word to the wise buyer and seller
Ok, Mr./Ms. Buyer- I understand you think prices are coming down. I won’t argue the point. However, where will interest rates be? Also, La Canada is a pretty small town. If you are buying for schools (and most of us do) than who is to say the best houses will be available later in the summer?
I think there is a major opportunity to look at homes that are NOT move in ready. The cash buyers are ignoring these homes, might the seller be more flexible?
Mr. and Mrs Seller- wake up!!! Things are not getting better and there is reason to believe they will get worse as the summer heats up. Don’t bet your future on a fantasy- the fantasy that you will get a better price if you just tough it out for x number of months. Things will NOT get better in that time period.
As they say in the Mastercard commercial, “Moving on with your life? Priceless”