Holiday shopping
Conventional wisdom holds that when Thanksgiving rolls around, home sellers put away their welcome mats. Not this year.
Real estate experts say that, with mortgage interest rates as low as they’ve been in 40 years and demand for housing as high as it’s ever been, buyers and sellers this year will dispel the long-held notion that transactions come to a halt until after New Year’s Day.
“I used to dread the end of the year, but not now,” said James Joseph, owner of Century 21 Grisham-Joseph in Whittier. “We’re experiencing the least slowdown in about 20 years.”
Agents from San Diego to Ventura report that homes of all prices, but especially in the lower and middle ranges, are being sold nearly as soon as they’re listed.
The fear of interest rate hikes continues to propel buyers into a market that shows no sign of slowing.
“I think this will be my best holiday season ever,” said Ron Wynn, an agent at Coldwell Banker in Santa Monica. These days, “buyers are coming out in the rain, and they’re coming out at midnight.”
Wynn, whose office handles sales in the $700,000 to $1.3 million range in Santa Monica, Westwood and Cheviot Hills, said that, despite high prices and bidding wars, buyers continue to seek homes in the tight Westside market.
One of Wynn’s clients, a highly qualified married couple with cash and loan approval, has been bidding on 1,700-square-foot “starter homes” (at $750,000) in Westwood for two years now. The eager first-time buyers have been outbid in multiple-offer situations half a dozen times, but they hope their luck will change this month, when they expect less competition.
Hancock Park seller Connie McCreight said she purposely put her 4,700-square foot, $1.95-million home on the market two days after Thanksgiving to attract those she believes are the serious shoppers at this time of year.
“People are busy and are traveling now, so if buyers show up, they’re probably the most interested ones,” McCreight said. “Also, my home never looks better than at this time of year, when it’s dressed up for the holidays. It’s a better time than ever to get a jump on the market.”
That seems to be the case in Newport Beach, where agents report no slowdown in sales.
Howard Wells, an agent at Cannery Village Realty, said that his office recently received several offers for an oceanfront tear-down listed at $1.75 million.
“Homes that are priced well on the water are on the market for a second,” Wells said. “If they’re not moving, it’s because they’re overpriced.”
The median price of new and existing homes and condos in Los Angeles County in October was a record $273,000. The 20.3% jump from last year represents the biggest increase since May 1989, according to DataQuick Information Services of La Jolla. A total of 10,422 homes were sold in L.A. County in October, the most for any October since 1989, when 11,403 were sold.
In Orange County, the median price of existing homes rose 20.9% to $393,000. The median price of condominiums, which recently have seen a surge of sales, was $252,000 in October, up 20.9% from a year ago.
Agents in the San Fernando Valley complain that low inventory and strong demand for starter homes continue to promote bidding wars, especially in areas such as Sherman Oaks and Studio City. Offers for homes in the $450,000 range there are “flying out the door,” said Dan Drantch, a broker associate at Coldwell Banker in Encino.
First-time buyers face the greatest obstacles, he said, enduring multiple offers on homes that are on the market, at most, two weeks.
Entry-level buyers all over the Southland are feeling the squeeze.
In Los Angeles County, the affordability index, which measures the percentage of households able to afford the median home price, fell to 30% in September, from 35% a year earlier, according to the California Assn. of Realtors. San Diego County posted the lowest affordability in Southern California, at 21%.
For those trying to get a home in the lower- or middle-range market, flexibility often is the key to winning bidding wars, said Arlene Kovalivker, a Young Realtors agent in Westlake Village.
Her recent clients, Newbury Park townhome owners Steve and Jana Giboney, quickly turned an offer to buy a four-bedroom home contingent upon the sale of their townhome into an offer with no sales contingency upon learning that another buyer had made such an offer shortly after their own.
The couple, who are confident they can sell their two-bedroom townhome within the 45-day escrow period, got the house.
“This is the way the market is,” Kovalivker said. “The ‘starter’ market is crazy.”
David and Kim Clesceri, La Mirada residents, used a different strategy recently to get the four-bedroom home in Brea that they wanted. David, a Whittier real estate agent, hand-delivered his offer, $2,000 over the asking price, which included a cover letter expressing the couple’s strong desire to raise their 6-month-old daughter in that house.
The sales agent pressed the couple’s case by phone with the sellers, who were out of town, while Clesceri waited anxiously in his car.
The emotional appeal helped him land the home that attracted three other bids the same day.
At the crux of this frenetic activity are record low interest rates, which are expected to fuel sales through the holiday season, said Nima Nattagh, an analyst with FNC Inc., a consultant to the mortgage industry. “People are anxious about the economy turning and don’t want to delay the buying decision.”
The average interest on a 30-year, fixed-rate mortgage with 1 point in Southern California in October was 5.9%, down from about 6.9% a year ago, according to National Financial News Services, which tracks such data. Average rates last week hovered around 6%.
“With rates the way they are, if a home buyer sees a good product and can afford it, they will buy it, irrespective of the time of year,” Nattagh said.
