Before I get to answering why homes are selling, I'd like to give you a sense of just how much homes are selling relative to the beginning of the year.
The below chart presents what we call Pending Sales activity or, Under Contract Properties. These are simply the number of properties wherein the seller has accepted the buyer's offer and an escrow has opened. Many Realtors (myself included) consider this data to be a more telling and immediate indicator of sales activity rather than 'homes sold' data, whereby the escrow closes successfully. This data reflects the aggregate of Bel-Air, Beverly Hills, Brentwood, Pacific Palisades and Westwood/Century City for SFR homes.
There's no question that some of this growth (in 2nd Quarter) is seasonal and is thus a constant. Just how much though is a matter of opinion. I believe a significant part of this growth signals an increase of sales activity in the upper-end of the market, which corresponds to an increase in Median Sales Price. The trend represented here for the Westside is also evident for Southern California as a whole.
Now for 'why' and the answer's fairly simple . . . . 1.) Sellers of upper-end properties are finally adjusting their prices to the point where buyers are stepping up and making deals as more sellers are realizing that the market will not support the inflated pricepoints of the past 2.5 years and it's time to get realistic and 2.) non-conforming ($417K to $729,750K) and jumbo ($729,750K+) financing is becoming more available (again, finally!).
What's important to note here is that sellers are adjusting their pricing to significant pricepoints that generate a deal far more through negotiation rather than sporadic or arbitrary asking price reductions. This is why I believe the best strategy to get a great deal is not to wait (correction, hope) for wholesale price reductions - go out and negotiate one! To embrace a 'wait and see' policy is to increase your exposure to the possibility of competing with multiple offers. If you can read about a great price reduction on a property, chances are you're already too late.
Sure, market pricing may continue to soften in some areas and by how much is a matter of conjecture. To be sure however, there are opposing market dynamics such as inventory supply that can moderate that. As sales increase, supply decreases. The Months Supply of Inventory factor in a number of Westside sectors has already shifted towards equilibrium and in a few instances even a seller's market (defined as less than 5 months of inventory). That action in turn, can lead to an increase of multiple offers.
By the way, you can drill down further on Westside sales stats by visiting the Market Sales Data section to see for yourself the data on which I base my presentations. The chart above is available and accompanied by 6 others with sales stats for both SFR and Condo homes in each of the 6 micro-markets.