If you, like me, are a constant peruser of online real estate listings, you may have noticed a dearth of new homes on the LA market last month. While falling mortgage rates and loosened restrictions coaxed more buyers off the sidelines, they were met with low inventory levels that caused home prices to escalate.
According to Realtor.com’s May 2020 Monthly Housing Market Trends Report, new home listings in the Los Angeles-Long Beach-Anaheim, CA metropolitan area fell 30.3 percent over the same month last year. The metro also recorded the highest year-over-year median list price increase nationwide in May, soaring 14.9 percent to $915,000.
The active listing count, which represents the total number of listings on the market whether they’re new or stale, declined by 17.3 percent. The typical home spent 67 days on the market, which is significantly higher than the May 2019 median of 25 days.
While the May data paints a relatively bleak picture for Los Angeles area homebuyers, it’s still an improvement over April when “the U.S. housing market likely reached its low point,” reads the report. New home listings plunged 50 percent in April as Mayor Eric Garcetti banned open houses and in-person showings for much of the month.
Reports of multiple-offer scenarios have been widespread, especially at the high end of the market. Naomi Klein, the Estate Director for Compass Los Angeles’ Sports Division and founder of @sundaysinthecity_, celebrated a bidding war victory in late May, beating out two other offers on a single-family home in Woodland Hills.
“Properties I was looking at with my client were selling within ten days,” said Klein. “Every single property I inquired about, and there had to have been at least 16 of them, had gone into multiple offers and were selling at ask or just above.”
Klein, who has won all but one bidding war in her nearly 17 years as a real estate agent, offers this piece of advice for LA buyers: “It’s really about positioning yourself well, and it’s important to be strong with your price and your terms of the contract.”
She notes that in real estate, there is a system of checks and balances to determine the true value of a home. Inspections and appraisals help to ensure that a buyer isn’t overpaying. Klein’s client put forth an offer that was $5,000 above the list price, which was accepted by the seller. And in the end, the house appraised for a whopping $192,000 over the selling price — something Klein says rarely ever happens.
Keeping a level head and having trust in your homebuying team is essential when engaging in a bidding war, as emotions can quickly get the best of you.
“Never negotiate against yourself, never negotiate against your fears,” said Klein. “If the appraisal comes back under [your offer price], at that point you should decide if you still want the house. Just don’t psyche yourself out!”