Success Story or Continuing Saga?

The biggest obstacle to getting your home sold is living in the past and trying to rationalize the value of your property and “what once was”. If you are selling your home you have to move away from the height of the market in August 2005. This cannot continue to be your reference point.

The sellers of this house realized that. This property is located in NE Pasadena and was listed for $700,000. It was in escrow in less than 30 days. The reason is that the sellers had an opportunity to relocate and were very reasonable with their expectations. They had a solid buyer and did not want to lose an opportunity. There is a saying in real estate that “Sometimes your first offer is your best offer” and that may or may not be true, but any offer is certainly worth a counter offer.

In Escrow in Less Than A Week

The sellers of this house understood the importance of pricing their home properly. How many houses in this market have an accepted offer after being on the market for only six days? Very few. How does a home sell so quickly, very simply it offers excellent value for the dollar. Value is best defined as “the price paid compared to the features or amenities that are offered”.

Does your home reflect a competitive price for the value that is offered? Before you answer that ask yourself “How many days has it been on the market?” The answer lies within. There is a house for sale in my neighborhood. In fact it has been for sale for over a year and with three different brokerage companies. Without seeing the house you know there is one overriding issue…..it offers no value at the listed price.

These Seller’s accepted The Secret

The owners of this property had a desire to move out of the area. They understood the key to selling their South Pasadena condo lied within the secret. As a result, they had an accepted offer in less than two weeks. Unlike many other property owners, they understood the fallacies in overpricing and thinking “we can always come down”.

So you see there are many success stories despite a slowing market. If your home has been listed for over 90 days it’s time for a reality check. When I list a house I let my potential client know that the biggest disservice I can provide is to overprice your property. Inevitably, sellers always begin to count their money. I cannot give someone an inflated value just to obtain their business. We take our fiduciary duty very seriously. People do not expect a property to stay on the market for months. Give me the Readers Digest condensed version. I’m not much on continuing sagas.

Two things are quite obvious; unit sales are off by about 50% across the board. This seems to be true in LA County as well as California. And secondly, inventory levels of homes listed for sale are at the highest point we have probably seen in the last 10 years.

Since the Pasadena area covers such a wide geography and demographic area and because all real estate is local, I decided to break down the analysis by zip code and further dissect what is happening with home values in our city.

Zip Code 91101 – This area is dominated by condos and townhomes. Last year saw quite a bit of activity on newer projects on E. Green St., S. Hudson and Union Street. A market shift has occurred with more mid priced units selling as opposed to higher end units. There are close to 29 homes in foreclosure with about a 10 month supply of inventory.

Zip Code 91103 – Homes within this zip code could be referred to as “A Tale of Two Cities”. This area includes million dollar homes in Linda Vista and also homes east of the Rose Bowl to Marengo. The million dollar market remains fairly strong, however if you exclude homes that sold over $1 million, the median price has fallen from $540,000 last year to $450,000 this year. There are close to 130 homes in this eastern part of the zip code in some stage of foreclosure and approximately a 1 1/2 year supply of homes for sale.

Zip Code 91104 – Including, Orange Heights, Bungalow Heaven, Historic Highlands, Garfield Heights and Brigden Ranch. There is a good cross section of homes in this area and the median price is down about 12%. Also this area is increasing in the number of foreclosures with about 100 properties currently listed. Close to a 10 month supply of homes on the market for sale.

Zip Code 91105 – This area includes San Rafael and features homes in the above average to high price range. It has also been the best performing neighborhood in Pasadena as far as maintaining value and will also be home to the new Pasadena Eco House. Home values have remained strong partly due to the low number (24) of properties in foreclosure. Current inventory indicates about a 12 month supply. This high number of homes for sale could very well produce some softening of values in the future.

Zip Code 91106 – This area features single family homes in Madison Heights in the million dollar plus range, but is also comprised of many condos and townhomes which make up about 75% of the units sold. Most of the price weakness in this area is from the 20+ year old townhomes and condos. Last year we did see the more expensive homes selling over their asking prices, however that has not been the case this year. This are 55 properties in foreclosure with the emphasis on condo/townhomes and several multi-family properties.

Zip Code 91107 – Local neighborhoods include Upper Hastings, Lower Hastings and Chapman Woods. Very similar to the characteristics in zip code 91104. Last year 12 recorded sales (townhomes & condo’s) occurred below $500,000, this year not one recorded sale. Again more evidence that the low end market is suffering the brunt of the housing slowdown. This zip code has suffered the largest decrease in unit sales and with the anemic sales in March, the current inventory is close to a 1 1/2 year supply. Foreclosure property count is 90 units and has been on the rise.

Also in an earlier post this Pasadena Realtor emphasized that we would soon be able to chart the course of the Pasadena Real Estate market by focusing in on one key factor….inventory. That number, indicating the quantity of Pasadena Homes for sale has been rising for the last few days, just as I predicted it would based upon this time of year. However we are not seeing any evidence of a corresponding rise in home sales.

Single Family Unit Sales Decline 50%, Median Price Falls 12%

March becomes the third successive month in which unit sales have declined at least 50%, dashing any hopes that in 2008 we would begin to see a reversal of falling sales and prices. We are also beginning to see a greater disparity between median sales prices than we noticed previously.

And to add insult to injury, it is taking about 1 1/2 times as long to sell those 50% fewer units with the days on market increasing form 83 to 125 days.

Pasadena Condominiums & Townhomes Mirror Single Family

The data indicates that no particular segment is performing any better or is immune to the overall health of the economy or the market. Sales prices were recorded from the high $200′s to the high $800′s. Rare in the sense that prices have dipped below $300.0 and also failed to reach $900.0, or higher.

Last year we were seeing quite a bit of interest in some of the new projects going up around town. As a consequence, the median price increased for several months which was the antithesis of the overall market. Now we are beginning to see some of these buildings offer new incentives to buyers as the developers invent creative solutions to deal with inventory that is not moving.