Still on the market
Even though most homes for sale are being snatched up, there are always some that seem to languish.
“Houses are going in weeks if not days,” said Randy Spalding, a manager at Gilleran Griffin Realtors in Westwood, “and if they’re not, they are overpriced in a hot market like this.”
The vast majority of homes have sold quickly for the last year and a half. Since January of this year, the average has been about 25 days in Los Angeles County and 23 days in Orange County. In 1993, the time a home sat on the market in the two counties was about three months.
Homes taking longer to sell, experts agree, are priced unrealistically; have a problem, such as a busy location; or are perceived by buyers as having something wrong because they didn’t sell right away.
Trying to ride the wave of incredible appreciation that Southern California has enjoyed the last few years, some real estate agents and sellers simply price homes too high, according to California Assn. of Realtors President Toby Bradley. Median home prices as of July for the region were up 21.6% from August 2002, according to DataQuick Information Systems. That’s on top of double-digit increases in median home prices across all counties from the end of 2001 to the end of 2002.
And although home values are continuing to rise, they may not be going up as quickly as sellers anticipate.
“I absolutely think that people are searching for the best price they can get and sometimes overshooting the market,” Bradley said, “but they are getting carried away because the rate of appreciation we are having is starting to slow down.”
Still, there are those who try to push the market anyway. “Some Realtors are taking listings $30,000 and $40,000 above the market, inflating the price,” said Ken Sampson of Coldwell Banker Properties, Porter Ranch. “They are saying the market will catch up to me or I can get the seller to go down.”
Others feel over-inflated prices are about greed.
“This market is bringing out the worst in a lot of people,” said Joseph La Croix, a real estate agent at Boardwalk Realty in Marina del Rey. “Some people think in this market, crazy prices still fly. I’m trying to tell them that’s just not so.”
La Croix knows firsthand.
He and a client recently parted ways after the Venice home they had listed in May remained unsold.
The house, a two-bedroom, one-bath traditional, was priced at $795,000. After four months on the market, La Croix said, they received only one offer on the property -- about $35,000 below the listing price.
La Croix thought the offer was good enough to take. But the seller refused, hoping to get the full asking price.
“They would have netted $200,000 after all costs,” La Croix said, “and that wasn’t enough for them.”
Manuel Solakian, with DiBeck GMAC, Glendale, has a $410,000 listing in Reseda he believes is overpriced. The property has been on the market since March.
“It’s worth $370,000, max,” Solakian said of the three-bedroom, two-bath home. “The seller is playing the market to see if someone will pay more than the property is worth.”
Solakian, a real estate agent for 21 years, points to a comparable home that sold on the same street for $330,000. “Eighteen offers in three days,” he said.
Other homes stay on the market because of problem locations. These properties have what agents call “an incurable defect,” such as being on a major thoroughfare or in an undesirable neighborhood.
Such is the case with one of Mike Pymm’s listings: a 3,000-square-foot, two-story, three-bedroom Spanish-style home on busy Crescent Heights Boulevard between Beverly and Santa Monica boulevards. The house has many positives: 12-foot ceilings, hardwood floors, original details -- even a separate mother-in-law apartment.
It was initially listed at $999,000 in February, but after 21 open houses and some low-ball offers in the $750,000 range, it still has not sold. The price now has been reduced to $899,500.
“It’s not critical for the owner to sell,” said Pymm, an agent with Bankers Realty in Beverly Hills. “The owner feels the house is worth what he is asking for and it’s just a matter of finding the right person.”
The owner, Bill Spero, 77, a longtime investor in real estate properties and stocks, said he sees the market as an opportunity.
“I think there is money to be made in real estate, even with this house priced as high as it is,” Spero said. “I think prices are ludicrous, but they are doing nothing but going up.”
Spero said he believes the home has not sold because it is larger than other houses in the neighborhood or because of the hand-painted cabinets in the kitchen, which some lookers have commented on negatively. Whatever the case, Spero isn’t budging.
“I am keeping it on the market indefinitely,” he said. “If I were to reduce it, it wouldn’t be by much.”
Even with a slight reduction, first-time home buyers Nicholas Pollack and wife Natasha, both 38, who have looked at the house, said they wouldn’t be interested.
“The house across the street is going for $100,000 less,” Nicholas said. “It’s smaller, but it’s in better shape.”
The Pollacks have been looking for two months for a home under $700,000 in the Miracle Mile, Larchmont and Fairfax areas of Los Angeles. So far, no luck.
“I won’t let frustration be part of my mind-set,” Nicholas said. “We want to see if we can find a bargain; otherwise we’ll just have to reassess.”
But frustration comes easier for Pymm, who would normally push a seller to lower a price further in a situation like this. He is remaining patient with Spero because they’ve been friends for 30 years.
“This is the longest listing I’ve had in Los Angeles,” Pymm said.
Another home in the Larchmont/Hancock Park area of Los Angeles hasn’t sold because of a behemoth apartment building that sits behind it, according to the listing agent Bill Toth, with Coldwell Banker, Burbank. The 3,547-square-foot home, built in 1928 and updated with central air, a new roof and copper plumbing, was originally listed in February for $968,000 and has since been reduced to $945,000.
But Toth is remaining patient, confident the lower price will move the property. In fact, one offer came in last week.
“I still think there are buyers out there for this one,” Toth said. “Ninety-nine percent of the time, price cures all defects.”
Other homes that aren’t selling may require a little extra vision.
Take Rocco Russo’s listing on Huston Road in Chatsworth, for example, which has been on the market since March, after the seller’s wife died.
About a five-minute drive from the 118 Freeway, the 9-year-old custom-built three-bedroom, 2,900-square-foot house sits on a rugged hillside that requires a drive up a winding, dilapidated and potholed road. The area is so primitive, at least by Los Angeles standards, that the street marker for Huston Road is an old wooden sign nailed to a post.
The house is part of a neighborhood called Lake Manor, a mishmash of newer and older homes.
“It’s a beautiful house,” said Russo, with Century 21 Hilltop LaCarre in Simi Valley, “but most people don’t even want to come up here to see it.”
The agent originally listed the house for $579,000 but has reduced it to $499,900 and spent hundreds of dollars on advertising.
“It has surprised me it hasn’t sold,” Russo said. “It’s my oldest listing. It’s probably the oldest listing I’ve ever had.... My gut feeling is it will just take the right person. This house isn’t for everybody.”
Agents say that the perception of a quick market has hurt some listings.
“People have a misunderstanding that if a house doesn’t sell within the first week something is wrong with it,” said Denise Fast of Re/Max Beach Cities-Venice. “Realtors have led buyers to believe this. If a house is on the market 30 days, that is quite normal.”
What can often skew things, according to Fast, is when homes in escrow fall out and then show up as being on the market longer and consequently become stigmatized properties.
Cecelia Waeschle, with Coldwell Banker Previews in Beverly Hills, said during the summer of 2002 she knew of an estate of more than $3 million that had been on the market just three weeks when a buyer made an offer. But the buyer rescinded his offer when he became troubled that the home hadn’t sold quickly enough.
The house was relisted and sold the next day, Waeschle said. “It illustrates how in a hot market, how strangely people can think.”
Allison B. Cohen can be reached at a.cohen@ix.netcom.com.
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How long it takes to sell a home
The average number of days homes for sale stayed on the market in Los Angeles County:
*--* Time on market Year 25 days 2003* 24 days 2002 27 days 2001 28 days 2000 34 days 1999 38 days 1998 49 days 1997 65 days 1996 75 days 1995 80 days 1994 95 days 1993
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* Year to date
Source: California Assn. of Realtors
