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LA Westside Market Showing Early Signs Of Strength

by Craig Whitlock

Having attended my fourth office meeting for the month, I'm noting some consistency in reports from my associates that suggest the market pulse is exceptionally strong for so early in the year - certainly greater than this time last year.  Here's what I'm hearing . . . . 

Open House Activity - heavy traffic in most areas in both SFR and Condo opens.  Agents are reporting traffic counts from 60 to 100+ groups on many Sundays for SFR homes.  Condos are running from 20 to 50 groups.
 
Multiple Offers - for any property that's close to being reasonably priced, multiple offers are often encountered.  I've heard of at least 5 transactions that began with anywhere from 8 to 12 offers on the same home.  
 
Increased Title Orders - my Equity Title rep for the last few weeks has noted a marked increase over the same period last year of new open orders for title insurance.  This is a lead indicator of escrow activity and this person works with many brokerages on the Westside.  
 
Lack of Inventory - In addition to my own observations, many agents have commented about the lack of available inventory in such areas as Brentwood, Santa Monica 90403, Pacific Palisades and the Wilshire Corridor.  This should not be interpreted as there are no opportunities but moreover, there's less inventory than there was at this time last year.  
 
What's this all mean?  There's a collective sense that:
 
1.)  Pent-up demand is swelling.
2.)  Inventory is diminished.
3.)  Buyers are realizing that home prices are (and actually have been) at the bottom and that fact in combination with amazingly low interest rates are prompting them to take action now.
4.)  Competition at the negotiating table may well be substantial - especially as we move deeper into the year.  
 
In summary, if you've been staying on the sidelines because you believe prices may drop or that waiting for Spring or Summer may be more convenient, I suggest you give consideration to the fact based on the above that sooner may be better than later to find the home that's right for you.

LA Westside Sales Highlights - December 2011

by Craig Whitlock

This report will provide a quick overview as to how the Westside micro-markets are currently performing and then compares that data to the same period a year ago.  The key market indicators are:

Pending Sales Activity - sometimes referred to as the 'Number of Properties Under Contract'.  This is a forward-looking indicator of current sales activity where there has been an accepted offer and escrow has opened.

Median Sales Price - that point at which half of the properties have sold for a greater amount and half have sold for a lesser amount.  This indicator pinpoints where in the price spectrum homes have sold rather than reflecting home value.  There is a common mis-perception that a drop in the MSP directly indicates a drop in home value.  It is far more likely that the drop indicates either smaller, older and/or homes in lower-priced areas have sold during the period.

Months Supply of Inventory (MSI) - a leading indicator of market supply, which directly impacts pricing.  Generally, a five to six month supply indicates market equilibrium while anything less signals a 'seller's market' and anything above a 'buyer's market'.  

LA Westside Homes For Sale - Sales Highlights Chart - December 2011   Information not guaranteed.  © 2009 Terradatum and its suppliers and licensors (http://www.terradatum.com/metrics/licensors)

To view a portfolio of four additional reports trended over the past 12 months:  Properties For Sale, Days On Market, New Properties For Sale and Supply & Demand, visit the Market Sales Data section.  If you have any questions or would like to discuss this data at greater length, just drop me a note or call.

A recent article in the LA Times (Loan Options Abound) pointed out some interesting facts about available loan options that haven't been widely publicized.  When it comes time to buy your dream home on the Westside, you should really do some serious investigating and you may well be surprised at what you'll find.

Mortgages can in fact be had with a downpayment of less than 20%.  There are loan products with lower downpayments out there.  There are some with as low as 10% or consider going FHA with just 3.5%.  The FHA over recent years has become a mainstream lending option and no longer carries a stigma as it did 10 years ago. 

Looking beyond the downpayment, you may be surprised to find options that feature lower credit scores and equally important, a lower debt-to-income ratio.  They're out there but have received little attention in the media.

The lack of accurate information on these programs has discouraged far too many prospective buyers from even considering an application much less shopping around.  Alex Stenback of the Residential Mortgage Group in Minnesota was quoted as saying "People just aren't aware of what's possible right now and as a result, they're missing (out) on real estate prices and long-term interest rate opportunities they shouldn't."

Even Doug Lebda, the founder and CEO of Lending Tree was quoted with the belief that 'the fear of being rejected' because they don't conform to standards that may not even exist is keeping qualified applicants on the sideline for no reason.

Many tend to believe that lenders are rejecting applicants with FICO scores lower than 750.  Many FHA lenders in fact are underwriting with scores from 620 to 640 and some (such as Quicken Loans) will consider scores as low as 580. 

The point here is that you should really do some shopping around and you may find that there's a solution out there that fits your situation.  To think outright that you may not qualify could be a mistake that could cost you opportunity at a time when market conditions are at their best for buying.

What do you think?  Have you tried only to not find what's right for you or have you been waiting until you think it's safer to try?  I'd like to know and just maybe, I might even be able to help!

 

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Craig Whitlock
COLDWELL BANKER BRENTWOOD
11661 San Vicente Blvd., 10th Floor
Los Angeles CA 90049
Mobile: (310) 488-4399
Fax: (310) 820-1457

Broker/Agent does not guarantee the accuracy of the square footage, lot size or other information concerning the conditions or features of properties provided by the seller or obtained from Public Records or other sources as presented in this website.  Interested parties are advised to independently verify the accuracy of all information through personal inspection and with appropriate professionals.  Information herein deemed reliable but not guaranteed.

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