Homes for Sale in LA Exceed the Sale Price
In Southern California, where homebuyers are seasoned auction war fighters, demand has recently weighed on supply so much that some neighborhoods are seeing most homes fetch far more than homeowners were asking for.
The median price of homes in the six-county area hit an all-time high of $ 619,750 in February, according to the most recent data from real estate firm DQNews, as buyers bolstered by low interest rates vied for the exhausted list of homes for sale. LA County’s median selling price rose 14.3% year-over-year to $ 708,500; The median for San Bernardino County jumped 17.7% and Riverside County rose 16.5%.
But the median price – the point at which half of homes sold more and the other half cheaper – gives a broad picture.
How bad is it really there?
Within LA city limits, more than half of the homes sold in March exceeded the listing price.
Of the 565 properties that traded hands, 287, or 50.8%, returned more than price, according to the Multiple Listing Service’s real estate broker database. A year earlier, 44.2% of homes were selling for above asking price. In March 2019, that figure was 36.1%.
The upward pressure on prices is greatest in the lower end of the market, where more buyers are competing for fewer homes.
Among LA homes listed for less than $ 1 million, 66.4% sold for more than asking price in March. Most of them were selling for between $ 1 and $ 10,000 above the original price.
In Lancaster, where homes typically sell for between $ 200,000 and $ 400,000, nearly 71% of homes sold for more than asking price. In Palmdale, another relatively affordable city, nearly 61% of sellers received more than the original price.
Luxury enclaves have also had a fair share of bidding wars that have driven millions of deals above asking price. Of the 392 Los Angeles homes that sold for over $ 1 million, 172, or 43.9%, sold for more than the original price.
Although the pace of the high-end bidding war is slower than in the low-cost markets, the size of the deals leads to some mind-boggling numbers.
“I’ve never seen a market like this,” said Joshua Myler of the agency, which sold actor Walton Goggins’ Hollywood Hills home in March for $ 3.665 million, or more than $ 300. 000 dollars more than the asking price. This surplus would buy an entire house in Lancaster.
“We have lower borrowing rates than we’ve seen in half a century and no inventory. It’s a perfect storm, ”Myler said.
Among Los Angeles’ tony communities, Hollywood Hills had the most homes grossing more than asking price in March. Of 75 homes sold, 26 sold for more than asking price – nearly 35%, according to the Multiple Listing Service.
For reference, in the same month of last year, 11 of Hollywood’s 40 homes sold for more than asking price (27.5%). In March 2019, nine of the 42 homes were selling for more than the asking price (21.4%).
“The pandemic has sparked this revolution where people rethink what they want to do and where they want to be. I had three clients who moved to New Zealand last year, ”Myler said.
Although some people are leaving LA, others are trying to enter. Myler had seven deals on Goggins’ list, including four from out-of-town buyers – somewhere out of town – in San Francisco, New York, Britain and China.
The over-demand effect was most pronounced in Santa Monica, where last month 16 of 27 homes sold sold for more than their original asking price. This is 59% against 40% last March and 33% in March 2019.
The trend is true in the even more expensive communities of Brentwood and Bel-Air, where the median home price hovers between $ 3 million and $ 4 million. Brentwood sold 10 out of 21 homes for more than demanded in March (47.6%) compared to three out of 14 in March (21.4%). Bel-Air had seven out of 23 (30.4%) against two out of 11 last March (18.1%).
In Beverly Hills, a 5,600-square-foot home that is still under construction traded for $ 10 million, more than $ 2 million more than its February listing price.
“There just isn’t much to choose from,” said Eric Lavey of Sotheby’s International Realty. “I sold everything I have.
Suburbs have made a comeback in a world with less commuting and more need for square meters and outdoor space, he said.
In the affluent San Fernando Valley neighborhood of Encino, 14 out of 25 homes sold for more than asking price in March (56%) compared to 12 out of 34 in March 2020 (35.3%) and two out of 28 in March 2019 ( 7.1%).
There is significant demand for homes under $ 3 million, Lavey said, but also demand for properties between $ 8 million and $ 10 million and even for high-end estates over $ 20 million. .
“A buyer wants a good deal in all markets, but right now a good deal is just getting a house,” he said. “Many have lost other properties, so they are bidding quickly to avoid a bidding war. There is a sense of urgency. “
Last month, Lavey sold the four-story Hollywood Hills home of Thomas Pentz, whose DJ name is Diplo, for $ 2.805 million, $ 110,000 more than his price. He had an offer in hand five days after the house was put on the market.