The Los Angeles-Long Beach-Anaheim, CA metro saw the second-highest jump in median list price growth nationwide last month, surging 24.3 percent to $994,154, according to realtor.com’s July Monthly Housing Trends report.
The typical home spent a total of 54 days on the market, just over a week longer than the same period last year. Pent-up buyer demand, primarily driven by record-low mortgage rates and a stalled spring market, caused inventory levels to dwindle in July, pushing prices higher.
Active listings in the LA area were down 22.9 percent compared to one year ago and the new listing count decreased by 10.4 percent on a year-to-date basis. While it’s certainly a favorable time to take advantage of lower rates, buyers are facing steep competition and even bidding wars on some LA properties.
“If a house is properly staged and priced under $2.5 million, it should be under contract — in my experience — in under 10 days with multiple offers,” says real estate agent Naomi Klein, the Estate Director for Compass Los Angeles’ Sports Division and founder of @sundaysinthecity_.
“There have been some properties that have had twelve, fifteen or over twenty offers on them.”
Klein notes that looky-loos have all but disappeared from the LA market and today’s buyers are highly motivated, submitting pre-approval letters and proof of funds prior to in-person showings. “There’s now an influx of qualified buyers who are ready to go,” she adds.
If the thought of facing a bidding war makes you clutch your purse a little tighter, Klein suggests steering clear of well-marketed homes. “Go for the property where the agent took horrible pictures because, most likely, other buyers are skipping that property so you have an opening there.”
Sellers might have the upper hand in the market, fetching higher prices for their homes than they likely would have pre-pandemic, but that doesn’t mean they should skimp on painting, cleaning and staging.
“It’s non-negotiable,” says Klein. “I’ve never, in my entire career, seen a home that’s staged do worse on the market.”
LA buyers’ seemingly insatiable demand for residential real estate isn’t likely to peter out anytime soon. With mortgage rates expected to remain low and new listings slowing to a trickle, buyers may spend several months searching for their perfect home. But that might not be such a bad thing in this time of pandemic ennui.
“Buyers have nothing else to do other than study the market!” jokes Klein.