Realtors working with buyers looking for homes in the Westside/South Bay market that are listed for under a million dollars feel like they are in a time warp as today’s market is reminding many of us what the 2004-2005 market was like. Thanks to the $8,000 tax credit, FHA financing, low interest rates and limited inventory, buyers are constantly facing multiple offer situations on market priced homes and having to provide proof of funds to cover the down-payment, full loan approval and anything else they can do to garner favor with the seller.
In the past seven days I have written 6 offers for clients ranging from $400,000 to $950,000 and all of them ended up in multiple offer situations that went over the asking price. Despite FHA financing allowing for buyer’s to only have to put down as low as 3.5% of the asking price, most of the buyers seem to have at least 20% down which is a good sign for the economy and shows that buyers who were on the sideline during the dramatic rise of the market have decided its time to jump in.
The first time homebuyer market under $750,000 is absolutely packed with buyers. This past weekend, a 3-bedroom 1,069 square foot new listing for $589,000 in the South Kentwood area of Westchester had around 200 people attend the Sunday open house and received 12 offers as of Wednesday morning. Each market priced home seems to have at least 3 buyers vying for the property.
I was caught a little off guard by this activity and don’t think it will last when the stimulus is no longer in play. However, even if the market dips again in the less than million dollar Westside/South Bay market, the lows of 2009 will not be surpassed.
Though I don’t believe we have seen the absolute bottom in terms of prices in the market above a million dollars, activity is definitely heating up. A new listing last week in the 300 block of 11th street in Santa Monica, which is approximately 3,800 square feet on a 7,500 square foot lot, received 5 offers and is supposedly in escrow well above the $2.675M list price. Furthermore, during yesterday’s broker caravan a house on Terryhill Place in Brentwood listed for $1.795M had over 170 agents and buyers tour it in a three hour period. . .
**Please note this only pertains to single family homes and not condos. Some condos are moving fast but this segment of the market is not as strong as the single family market.