Homes priced between $300-$400,000 in L.A. County increased during the same period by 278 transactions (representing a 33% increase). This price range represented 19.0 percent of the total sales for March in the County. The price range from under $300-$400,000 by most realtor's definition is a sellers market. Shrinking inventories when adjusted to seasonal trends, and increased demand will yield higher prices for these properties over time. In addition, there are ample financing sources for buyers in this price range (which reduce a buyer's closing costs and/or down payment requirements), i.e., FHA, first-time home buyer programs, down payment assistance programs, conventional loans, etc. These market trends bode well for sellers as well as for buyers.
Over $400,000 the market turns downward. The March numbers show less demand evidenced by prices dropping and totals sales dropping while inventory levels continue to rise due to the pending summer season. In March 09, the number of homes sold in this price range dropped to 1,013 transactions (a 277 transaction drop from March 08). A 21% reduction from one year to the next. Oftentimes these listing stay on the market longer, sell for less and have difficulty closing due to financing issues. So qualified buyers with down payment flexibility and patience have significant clout and leverage in this market.
Investors and home buyers who can qualify for higher priced homes are entering the lower end of the market because of perceived value. Unfortunately these buyers are not prepared for the increased competition for these properties. Buyers who are looking to take advantage of the lower end of the market need to be prepared financially to move quickly because with every hesitation and uncertainty breeds competition for these properties that ultimately drives price and availability.
Other strategic decisions can be made to increase your chances of success if you are interested in bank REO ("real estate owned") or "short-sale" properties. Currently, bank REO properties represent 60% of all sales in Southern California. Although these properties are theoretically the same as non-foreclosure properties, there are strategies that will give you an advantage when negotiating the purchase of these types of properties. Your typical realtor who is unfamiliar with REO transactions or short sales may place you at a serious disadvantage. So beware.
Buyers entering the So. California $300 to $400,000 price range needs to assemble your team so that you can utilize your time efficiently while maximizing your investment (by reducing your financial and legal liability). Get pre-qualified and move strategically into the market segment that fits your investment goals and quality of life style. Select your realtor and your mortgage lender/broker with care and they will guide you through the various legal and financial mazes that arise throughout the process.
For sellers, marketing strategies will vary depending upon your price point, location (micro-market) and your specific situation (the "why" your selling). Locating the right realtor who has the expertise, experience, attitude, commitment to service, and team in place will improve your chances of selling your property within a reasonable period of time and for a price that makes sense for you.
If you are a pending buyer or seller interested in exploring your options; then either visit www.coastalcommunityhomes.com or email Jim Peys at jim@peys.net. For buyers interested in exploring your financing options you should email Adriana Lanting at adriana4loans@gmail.com. You can follow us daily on Twitter under JTPAssociates and Adriana4loans. Regardless of whether you are a buyer or seller in this market, we have the right mix of solutions (products and strategies) and commitment to our clients that will insure your success!
Posts
No comments:
Post a Comment