Residential Market

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Analysis: A quick take on Arcadia and residential properties with near-term upside.

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Over 100 residential properties have closed in Arcadia in 2017 and about 200 are currently active and listed for sale. Here's what the data tells us about this coveted LA community.

Key Takeaways:

  • Of the 100+ homes sold in Arcadia in 2017, the average selling price has been $1.4M, while the median is $1.1M. Although average is greater than median, we're seeing a much tighter band in Arcadia relative to the rest of LA, so homes are more normally distributed in terms of price.
  • Average days on market for homes sold is 64, while median is 50. Generally speaking, homes are sitting on the market for about 2 months before selling. This is more or less true across all price points in Arcadia and is higher than the LA average by about 10 days.
  • There are currently 20 homes listed in Arcadia below the $1M price tag. And with most selling prices in the $1.1M - $1.4M range, this means lots of potential upside for buyers and an opportunity to sell for homeowners looking to list below $1M.

So what does all this mean?

Well, first Arcadia is certainly one of the higher priced real estate markets in LA, with most homes going for over $1M. With higher price tags comes more days on market, so patience is key for locking in value for both buyers and sellers.

Well qualified buyers have opportunities to buy below $1M and gain plenty of equity in the near term. Homeowners looking to sell below $1M also have a unique positioning opportunity for home buyers looking to ramp up on equity.

Arcadia is definitely a challenging market given current price points and just stagnation in LA on the higher end of the market. However, there are opportunities in the low end price points that could be attractive for speculative buyers and homeowners who seek them.

We love talking strategy here at Contempo, especially when it comes to positioning difficult homes in what appears to be cold markets. Arcadia is just one example.

If you're looking to sell or looking to buy properties with the most upside, reach out and we can talk strategy.

Sellers can also try our free market analysis to get a view into who you're competing with for the best buyers.

 

 

 

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Analysis: Real estate price action in Northridge and what buyers and sellers should know.

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We looked at over 230 properties in Northridge either currently active or sold in 2017. Here's what the data tells us about the market and what folks should know if they're looking to jump in or if they're already in the mix.

Here are the key takeaways:

  • There are currently 105 active listings in Northridge, 89 are single family detached homes and the rest are condos / town houses. This is the size of the active pool buyers are considering if they want to move to Northridge. For sellers, this is your larger competitive pool.
  • The average price is $839K, while median is $755K. When average is greater than the median, this means there are a handful of really expensive homes pulling the average up (very common in LA). 
  • In terms of size, we have a pretty normal distribution--both median and average are around 1640 sq ft, on the larger side relative to the rest of LA.
  • Out of the 105 listings, 32 have changed their price. Most of which (about 85%) have been price decreases. The average price decrease is $33K while median is $22K.
  • 134 properties have closed in 2017 thus far. Median selling price is around $600K, while average is $635K. Average days on market is about 53, median is 38. This is the sweet spot for sellers as we move into the selling season.

Okay so what does all this mean?

First, in terms of active listings, Northridge is a very competitive market! 

A big chunk of homes are around the same size, but have significant variance in price. This means plenty of room to negotiate for buyers, and pressure on sellers to defend value. I love this sort of competition. We're seeing this play out in the price action.

Second, we're seeing price action for almost 30% of active listings, with most lowering their price. Agents and their clients seem to be jumping in with high expectations and unfortunately weak marketing skills, because prices are dropping.

Finally, based on the data of closed deals in 2017, we're seeing houses at the lower price points close. This makes total sense right now. With a pretty normal distribution of size, buyers are grabbing deals at the lower end because these homes have the most upside.

This is the type of action I like to see and it's the type of competition I like to get into. If you're looking to jump in the market, or perhaps you're already there, reach out and we can talk strategy.

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Analysis: Average days on market for homes sold in 2017 and what it means for sellers.

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Having the right expectations can mean the difference between closing the best deal and settling for a lower price. This is especially true when it comes to optimal days on market for residential listings.

In this post, we analyzed about 2700 deals closed in the LA area for 2017 to give sellers a view into what they can expect when they enter the playing field.

Key takeaways:

  • About 2700 residential property deals (from single family homes to condos & town houses) have closed in 2017 year-to-date (**see areas below).
  • On average, detached single family homes are on the market for 59 days before selling. On average, condos & town homes are on the market for 54 days before selling. Median days on market are notably much lower. The median days on market for detached single family homes is 42 and for condos & town homes 40.
  • When average is higher than median, this means a small group of homes are staying on the market much longer and pulling the averages up. In reality, the most realistic expectation for most sellers is around 40-42 days, or just over a month.
  • For condos and town houses, 40% of homes sell within the first month of being listed. The same is true for detached single family homes. So another reality is that most will be waiting more than a month.
  • When we look at days on market by home size, numbers change significantly. Homes under 1800 square feet can expect to sell within the first 2 months, but above 1800 square feet we see numbers go up significantly above 2 months.
  • Size plays a big role in how long you can expect for your home to sit in the market in LA.

**Areas we analyzed: Los Angeles, Burbank, Glendale, Pasadena, Sherman Oaks, Northridge, Tarzana, Beverly Hills, Granada Hills, Van Nuys.**

So what does this all mean? First, sellers are facing days on market upwards of a month on average for both detached single family homes and condos. This is mostly true for homes below 1800 square feet. So if you fall into this category, it is not unfair to expect this type of performance from your realtor.

Second, larger homes are sitting on the market much longer. Homes above 1800 square feet can expect upwards of 2 months sitting on the market. Thus, folks with larger homes and their realtors have more work to do in terms of finding and competing for the right buyers. Based on this early data, larger homes and the luxury market are facing the most headwinds.

All in all, 2017 is shaping up to be what I call a year for strategic patience. But if you can't afford to wait and don't want to put your future on hold (nor should you!), there are ways to beat these numbers and we have proven strategies to do so.

Interested in learning more? Feel free to reach out and get a better idea of what we can do for you. You can also try our free market analysis, and we'll provide something tailored just for you to get you started on your selling journey.

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LA homeowners cash in on Airbnb hosting, company data shows.

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Low supply of rentals in LA are starting to pay dividends for homeowners who are leveraging Airbnb for extra cash. Hosts in LA made a combined $262M in 2016, making it the top Airbnb city in California.

As a prime destination for dreamers looking to open up shop and tourists looking to experience LA the way locals do, it makes perfect sense Angelinos are able to cash in on the Airbnb phenomena. In a previous post, we discussed a fundamental reality in the greater LA area for both rentals and residential listings -- low supply and high demand. 

The economics can't be denied and we're seeing it play out in the the Airbnb circuit. In fact, the LA times reports that Californians sharing their homes through the Airbnb platform grew 51% in 2016 compared to 2015. That's over 76,000 hosts in CA in 2016 compared to about 50,000 in 2015. 

With about 1M guests annually, LA is the top city in California, followed by San Francisco (444,000 guests) and San Diego (357,300 guests) rounding out the top 3.

What does this mean for homeowners? What are the implications for those looking to sell? Feel free to reach out and we can talk strategy. Otherwise, you can also try out our free market service to get a lay of the land in your neighborhood.

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Analysis: Active residential listings in LA and where there's lots of action. (Part 2)

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We analyzed 2000 residential properties sold in 2017 thus far. Here's what we learned about what's selling, at what prices and at what volume. This is especially useful for homeowners looking to sell and get into the market mix.

Key takeaways:

  • About 2000 residential property deals (from single family homes to condos) have closed in 2017 year-to-date (**see areas below). The average close price is about $1M, while the median is about $700K. In other words, these are the prices homes are typically selling for across the greater LA area.
  • These prices are dramatically different from what we're seeing in the current active listing space. If you recall from the previous post, the average price of active listings is $2.2M while the median is $988K. These are 200% higher than the average and 50% higher than the median of what's actually been closing.
  • Almost 50% of deals are for properties between 1000 - 1500 square feet. This is where the bulk of the competition is highly concentrated. These homes are selling for anywhere between $600K - $800K on average. These are pricing anchors for sellers who want to charge closer to $1M for homes within this size range.
  • Interestingly, 25% of deals are for homes above 2000 square feet. This highlights the ability of larger homes to take a chunk out of the selling share. Larger homes are definitely closing at a healthy pace, so there's clear demand.
  • For homes between 2000 - 2800 square feet, $1.1M - $1.6M seems to be the sweet spot price range based on average closing prices in 2017.

**Areas we analyzed: Los Angeles, Burbank, Glendale, Pasadena, Sherman Oaks, Northridge, Tarzana, Beverly Hills, Granada Hills, Van Nuys.**

So what does this all mean? First, closing prices are way below the prices of active listings, so as we've mentioned, there will be pressure to defend value. We do know that supply is low, so sellers can still have an advantage if they position their homes the right way.

Second, there are pricing anchors for areas where there's high competition in terms of square footage. Sellers should be aware of this and be sure to focus on key differentiators of their homes and neighborhoods that justify prices above median or average.

Interested in talking strategy? We can help. You can also try our free market analysis, and we'll provide something tailored just for you.

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Analysis: Active residential listings in LA and where there's lots of action. (Part 1)

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We took at look at over 2800 active residential property listings in LA to give you a sense of where there's action and what sellers can expect as the season heats up. Here's what we found.

 Key takeaways:

  • There are currently over 2.8K active listings in the greater LA area. This includes single family residences, townhouses and condos. This is the size of the active pool in LA that buyers will be considering in the weeks and months to come. As we mentioned in a previous post, however, you can expect this number to increase significantly towards the end of March all the way up to June.
  • The median price of all active listings is currently $988K, while the average is $2.2M. When average is greater than the median, this means there is long tail of very expensive properties pushing the stats higher.
  • Right now, 1/3 of all listings are well above $1.5M. This is a pretty solid distribution of competition across all price points.
  • Single family residencies account for 71% of all active listings (just over 2000 listings). The median value of single family residencies is currently $1.2M across all areas.
  • About 10% of active listings (200) have lowered their price by a median reduction of $29K. That's pretty substantial and indicates plenty of competition for the right buyers.
  • Beverly Hills and Pasadena have by far the most active listings with about 200 each. In these types of extremely competitive environments, we can expect more downward pressure on price as properties will compete for the best buyers.

So what does all of this mean? It's simple. The season is just getting started and competition is already ferocious.

What I'm most looking out for is price action. Right now 10% of listings are consistently lowering their price. With more listings entering the market, it will be interesting to see what happens to that number.

I still think it's a sellers market. I do think homes need to be positioned strongly to the right buyers so they can uphold their prices. Right now, at least 10% of homes are missing out on the low housing supply advantage.

Are you thinking of selling your home and want to talk strategy? Feel free to reach out. You can also try our free market analysis service to help you with your research.

Are you ready for more competition? The spring wave of new residential listings is almost here.

There are over 2000 active listings in LA right now and the competition is about to intensify. What can buyers and sellers expect? Here's what the data tells us.

According to Realtor Magazine, spring is by far the hottest season for new homes to enter the market (see the chart below). We can expect active listings to skyrocket during this period well above 2000. And make no mistake there will be winners and losers.

For buyers, this means more choices. For sellers, it's all about increased competition. This is the season that rewards homeowners who know how to position their homes to ideal buyers. Buyers, on the other hand, will be rewarded for doing their homework early and understanding the the lay of the land when it comes to price and value.

In both cases, data is your best ammunition! 

Stay tuned for the next post when we provide an overview of current listings throughout LA. We'll tell you what to look out for and what we can expect with the new wave of listings coming this spring.

Feel free to reach out any time if you would like a custom analysis of your market. You can try our free market analysis service.