Hot Properties Cool Buyers’ Hopes
The real estate feeding frenzy forced Manuel Aldana to give up hopes for even a modest single-family home and settle for a smaller condominium.
The competition was just too tough. Home prices were climbing too fast. Offers were coming in high. And prospective buyers and their real estate agents were not waiting for formal open houses to visit properties.
So homes that Aldana considered reasonably priced in January became unaffordable. The cheaper townhouse would have to do.
“When I started looking, the prices were fine,” said Aldana, 43. “Then they started climbing real fast.”
The latest real estate statistics show the average sale price of a single-family home in the San Fernando Valley was $260,900 in March, up 26% from the $207,600 average paid a year earlier, and up 3% from the average price in February.
For condominiums, the average sale price in the Valley last month was $119,800, compared to $96,500 in March 1997.
According to the Southland Regional Assn. of Realtors, 1,124 single-family houses were sold last month, the most homes sold in March since the boom of the late 1980s.
Those in the industry credit the sizzling market to a combination of factors, including pent-up demand, mortgage-loan interest rates that have dipped below 7%, and a healthy economy.
“I have never seen as fast a swing as we have had in the past two months,” said Marvin Kapelus, owner of Buyers’ Exclusive Realtors of Oak Park.
George Guetzoian, general manager of Century 21 Valley Properties Inc. in Canoga Park, said: “It’s shaking people off the tree.”
But the current hot market also means inventory cannot keep up with demand. At times, agents are being forced to tell clients that their dream house may not be out there at the right price. Of course, that only creates more frazzled nerves.
“It almost feels like you’re not going to get a house,” said Mirjam Korver of Agoura Hills, who has been outbid six times in the past two months. “The prices are escalating so quickly.”
Korver’s experience is not unusual these days. Unlike in the recession years, many homes are getting multiple offers--some several thousand dollars over the asking price.
One of Kapelus’ clients, for instance, recently was interested in a Sherman Oaks property, but the house was bought by someone who paid $20,000 over the asking price of $360,000.
When agents get tips about homes that are about to go on the market, they try to get their clients in to see the property ahead of everyone else. Some homes end up in escrow before a “For Sale” sign is posted in the front yard.
Ellen Carpenter, 53, who has been looking for a four-bedroom home in the south Valley for two months, is convinced the sizzling market is making it nearly impossible to find the perfect home.
“There’s a lot fewer than a year ago,” said Carpenter.
Carpenter, a Woodland Hills resident who started house-hunting again recently after taking a break from the market a year ago, has started joining Kapelus on first inspections of a few houses each week. Under less frantic circumstances, the agent would inspect the houses himself and show his customers the ones he thinks they may be interested in.
Not now. At least not for Carpenter.
“If it’s a great house and he calls,” she said, “by the time we get over there it may be sold.”
Korver, 42, agreed, saying the pressure to make a quick offer is intense.
“When a house comes up, you have to look at it and make a bid that day or chances are, you’re not going to get it,” she said. “You don’t have the luxury of thinking about a very big investment.”
Customers tagging along with agents have become more common in the last few months, said Robert Bluman, director of Fred Sands Estates in Encino, who has seen homes sell in a day.
But even getting a look at a house quickly will not necessarily help those potential buyers who can’t match the buying power of others.
And more people figure to lose the remaining bargains as prices continue to climb, according to some in the field. Summertime is normally when the market speeds up.
“The longer people wait now,” Guetzoian said, “the more they’re going to pay later.”
The average home price is still about 1% below the $262,300 average sale price in March 1993, and 15% below the $307,100 average in March 1990, shortly before the local housing market collapsed.
But some sweet deals may remain.
Angie Rovero, 26, doubted she and her fiance could afford a house in West Hills, until she went out looking last week.
To her surprise, a three-bedroom home with a pool on Lull Street was priced at $188,900.
The couple figured they could spend up to about $200,000 on a house.
“I didn’t think we could get something in West Hills,” he said. “I didn’t expect [the house] to be so nice.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
San Fernando Valley Residential Sales
March 1998: 1,414
March 1997: 1,149
March 1998: $232,000
March 1997: $181,800
March 1998: $163,000
March 1997: $145,900
March 1998: 2,300
March 1997: 2,196
March 1998: 5,008
March 1997: 6,320
(Includes single-family homes & condominium sales)
Source: Southland Regional Association of Realtors