What’s Hot and What’s Not
BY ERIC CHODOROWTeam Chodorow
Prudential California Realty La Jolla
Notwithstanding decades of experience in our real estate market, I have never seen a market quite like this. Here is an overview of the market and some thoughts about short sales and foreclosures.
The market for homes divides into three categories. - The ratio for properties priced under $2.5 million is 111 on the market and 33 in escrow (29.7 percent). - Between $2.5 million and $4 million, it is 46 to 4 (8.7 percent). - Over $4 million, only 57 to 2 (3.5 percent).
The condo market is strong for units up to $1.25 million; the ratio is 99 to 36 (36.4 percent); the market above $1.25 million is very slow, 22 to 2 (9.1 percent). A year ago, condos took the hardest hit in price and sales volume as the market collapsed. Now that the market is rebounding, condos are leading the way.
The La Jolla market anticipated the crisis of 2008. Between 1988 and 2004, prices increased steadily. Beginning in 2000, we handled many multiple offers and offers above list price. Then, in 2005, prices started to decline, and the sellers’ market became a buyers’ market. In 2009, the median sales price in La Jolla was actually lower than in 2004.
But there is good news. Every month the number of escrows is growing. Investors and second-home buyers are back in the market. Families are looking for homes, hoping to lock in a low interest rate; it is now rising.
Prices aren’t going up, but they appear to be stabilizing. They won’t rise until the inventory thins out and significant number of short sales and foreclosed properties are sold — short sales and foreclosed properties are selling way below 2004 prices.
The buyer of properties that have been foreclosed or are subject to short sales must have patience and a high tolerance for uncertainty, because the banks are slow to respond to offers and offers are subject to overbid.
The market’s inventory of homes and condos is high, the quality has never been better, and most sellers are ready to sell at realistic prices. Those who buy soon will be very glad they did.