Now that the summer rush has died down a bit, local Realtor Elise Knepper of The Property Shop LA decided to take a breather and have a look back at what’s been happening in Northeast LA real estate over the last nine months, stats-speaking.
For starters, it goes without saying that competition for the good homes out there has been fierce. We’ve felt it, too, so last month when we won a great Eagle Rock flip for our clients with no counter offer and no pledging of our firstborn, it was pure joy all around.
According to Redfin, three out of four sales in 2013 have been bidding wars, and one in three homes was in escrow within the week. (we think the only reason that number isn’t higher is that in NELA, offers are usually not reviewed until after there have been a few open houses).
Why the frenzy this year? Well, from our perspective, it did not come on as fast and strong as the media leads us to believe. We felt a dramatic shift in activity beginning as early as 2011, when many home buyers’ confidence in the economy was restored, and mortgage rates began to fall to a level our parents could never imagine. At the same time, many burned in the stock market are choosing to invest their money in a home instead, and purchasing with all-cash.
All of these factors created a backlog of buyers who had been sitting on the sidelines for a few years, and resulted in a perfect storm. It became normal to compete with 10 other offers on the best properties, and we saw plenty that quickly sold for 100K+ over the asking price.
Can it last? There has been a bit of a cool-off since the summer as rates jumped a point or so, from 3.4% to 4.5%. But in our neighborhood, a “cool-off” means perhaps six offers per home instead of 10. Prices are still up about 20% over this time last year, and successful home buyers still need to be aggressive, quick, and have a strong, local agent behind them.
If all the tales of overbidding have you down, consider the upside— home sellers have heard the news, too, and that has meant more of the quality listings we love…finally!
How’s 2014 looking? With rates continuing to rise slowly but surely, we think some first-time buyers will be forced out of the market. But there are still far more buyers intent on finding the perfect place to nest than there are great homes out there (we are, after all, the hottest neighborhood in the U.S.).
We’re betting that mortgage rates of 4.5% is still a pretty big plus for many Eastside home buyers and, with sales prices still below their 2006 peak, we expect that 2014 will be much of the same.
What’s the bottom line? Buyers shopping from Silver Lake to Highland Park will spend more for the same adorable Craftsman than they would have at the absolute bottom of the market, but there will be more to choose from and fewer folks to compete with…and that sounds good to us.
No matter the market, we are here to help you navigate it…and change your mind about real estate agents, one happy client at a time.
If you are looking to buy or sell in the neighborhood, get to know us at www.ThePropertyShopLA.com.
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