Seven takeaways from networking meetings with top realtors on the Westside
* January and early February were very slow from a transaction standpoint. However, things have taken off since with the Westside market taking another step up in appreciation since the Super Bowl. Well-priced new listings are going into strong multiples and properties that sat on the market longer than anticipated were absorbed by buyers, once pricing fell in-line with market expectations. We are expecting opportunities for buyers to pick-up in April, but thus far quality new listings are few and far between.
*Most agents feel that we will see further price appreciation in 2017 but the growth will be tempered by interest rate increases and affordability ceilings in certain segments and areas of the market.
*Rumblings of possible increased investment from Japan, and though we see continued interest from Chinese buyers, it is not at the rate we saw a few years ago. We are seeing a ton of Chinese money flowing into development projects downtown and the residential markets on the east side of Los Angeles where the Chinese influence is already very strong.
*We are seeing a strong crop of young buyers with parents who are helping them with major down-payment assistance and/or all-cash offers that are financed during escrow. Besides the parents thinking that real estate is ultimately the best long-term leveraged investments, the other motivation is the parents remember when interest rates were around 10%, and want their children to attain a home at the low rates that many feel will not be available in the future.
*New construction and tear-down type properties are the hottest type of inventory throughout the Westside/South Bay. New construction under $5M is mostly selling at a premium with the exception of poorly built product with flawed floor plans. Buyers are willing to pay a premium for a new home but builders that build a cheap home in pricy neighborhoods will see their product sit and face price reductions.
*About 15% of new construction is selling before they hit the market and teardowns are selling off-market at a clip of about 20%. Many realtors and agents feel that residents who are selling a teardown home are being taken advantage of the builders and are potentially losing hundreds of thousands of dollars by not having a representative for their own interest. Builders are commanding a premium for the right to purchase pre-completed projects in which sellers can choose finishes, etc.
*Millennial homebuyers are tough negotiators. They learn the markets they are in very well and are willing to take their time to find the right property at the right price.