Tight market reins in real estate

The combination of few homes for sale, low prices and extremely low interest rates continued to drive competition in the local real estate market in June, the third straight month to see buyers scramble for mid-priced properties.

The number of homes listed for sale in June was lower than at the same time a year ago in Pasadena, La Cañada Flintridge, South Pasadena, San Marino and La Crescenta.

While only 354 homes were listed compared to 593 a year earlier, the number of homes sold in all those cities combined was nearly the same as last June, 169 compared to 174, according to figures compiled by Glendale Keller Williams agent Keith Sorem.

Prices are not matching figures from a year ago in most cities, keeping many would-be sellers on the sidelines.

The average price for a home sold in Pasadena in June was $808,000, compared to $852,000 a year ago, according to Sorem.

In La Cañada, the average home sale price was $1.10 million, compared to $1.51 million a year ago, in part because there is little activity at the high end of the market. In La Crescenta the average price was $534,000 in June compared to $608,000 a year ago.

In South Pasadena, where only five homes sold last month, the average price was $658,000 compared to $899,000 a year earlier. San Marino, driven in part by Chinese investors, saw the average home sale rise from $1.65 million in June 2011 to $1.74 million last month.

But agents report that competition for the few available properties is vigorous. Jackie Darling of Coldwell Banker in Pasadena said she recently listed a southeast Pasadena home for what she thought was the right price at $950,000. She quickly received 10 offers, including four all-cash offers from investors who didn’t need to battle through the tough loan-approval standards put in place in the wake of the real estate bust of 2007-08. The house sold for $990,000, Darling said.

The price per square foot of home sales has risen in every city except Pasadena compared to a year ago, and Darling said she believes sellers, who have been staying off the market in droves, will begin to test it.

Sorem said that since transactions usually take up to three months from the first offer to the close of escrow, the market may begin to reflect an increase in prices over the next few months.

At the same time, he wrote in an email that the lack of listings “makes one wonder at what point there will be so little inventory that, contrary to the trend for the last three years, year-on-year closed sales will begin to fall.”

Pauline Ching of Podley Properties in La Cañada noted that distressed properties, those owned by banks via foreclosure or considered short sales because the sellers are underwater, are attracting bargain hunters all over the region. However, she emphasized that La Cañada has almost no distressed properties.

Sorem reports that distressed property sales accounted for only 9.5% of sales this year in La Cañada, while most neighboring cities are seeing between 21% and 38% of the listings are short sales and foreclosures.